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Chapter 12 - The Collective Hot Stove Effect

from Part III - Consequences of Selective Sampling

Published online by Cambridge University Press:  01 June 2023

By
Gaël Le Mens ,
Balázs Kovács ,
Judith Avrahami  and
Yaakov Kareev
Edited by
Klaus Fiedler ,
Peter Juslin  and
Jerker Denrell
Klaus Fiedler
Affiliation:
Universität Heidelberg
Peter Juslin
Affiliation:
Uppsala Universitet, Sweden
Jerker Denrell
Affiliation:
University of Warwick
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Summary

The “Hot Stove Effect” pertains to an asymmetry in error corrections that affects a learner who estimates the quality of an option based on his or her experience with the option: errors of overestimation of the quality of an option are more likely to be corrected than errors of underestimation. In this chapter, we describe a “Collective Hot Stove Effect” which characterizes the dynamics of collective valuations rather than individual quality estimates. We analyze settings in which the collective valuation of options is updated sequentially based on additional samples of information. We focus on cases where the collective valuation of an option is more likely to be updated when it is higher than when it is lower. Just as the law-of-effect implies a Hot Stove Effect for individual learners, a Collective Hot Stove Effect emerges: errors of overestimation of the quality of an object by the collective valuation are more likely to be corrected than errors of underestimation. We test the unique predictions of our model in an online experiment and test assumptions and predictions of our model in analyses of large datasets of online ratings from popular websites (Amazon.com, Yelp.com, Goodreads.com, Weedmaps.com) comprising more than 160 million ratings.

Keywords

samplingnegativity biasHot Stove Effectcollective evaluationsonline ratings
Type
Chapter
Information
Sampling in Judgment and Decision Making , pp. 266 - 286
Publisher: Cambridge University Press
Print publication year: 2023

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