Confidence Modulates the Conformity Behavior of the Investors and Neural Responses of Social Influence in Crowdfunding

Abstract

The decision about whether to invest can be affected by the choices or opinions of others known as a form of social influence. People make decisions with fluctuating confidence, which plays an important role in the decision process. However, it remains a fair amount of confusion regarding the effect of confidence on the social influence as well as the underlying neural mechanism. The current study applied a willingness-to-invest task with the event-related potentials method to examine the behavioral and neural manifestations of social influence and its interaction with confidence in the context of crowdfunding investment. The behavioral results demonstrate that the conformity tendency of the people increased when their willingness-to-invest deviated far from the group. Besides, when the people felt less confident about their initial judgment, they were more likely to follow the herd. In conjunction with the behavioral findings, the neural results of the social information processing indicate different susceptibilities to small and big conflicts between the own willingness of the people and the group, with small conflict evoked less negative feedback-related negativity (FRN) and more positive late positive potential (LPP). Moreover, confidence only modulated the later neural processing by eliciting larger LPP in the low confidence, implying more reliance on social information. These results corroborate previous findings regarding the conformity effect and its neural mechanism in investment decision and meanwhile extend the existing works of literature through providing behavioral and neural evidence to the effect of confidence on the social influence in the crowdfunding marketplace.

When the Counterpart Chooses the Opposite: The First Mover’s Anticipation and Evaluation of the Final Feedback in Gambles

“…In previous electrophysiological studies involving social interactions, the FRN has been identified as a signal that characterizes the evaluation of social information. Specifically, when people observe that their own opinions or behaviors are different from those of others, this social information would be regarded as a negative outcome and then elicit a larger FRN ( Cialdini and Goldstein, 2004 ; Klucharev et al, 2009 ; Shestakova et al, 2012 ; Kimura and Katayama, 2013 ; Wang et al, 2019 ; Zheng et al, 2021 ). Such inconsistency indicates a deviation from the social norm ( Cialdini and Goldstein, 2004 ), and represents the loss of a potential social reward ( Kim et al, 2012 ).…”

“…As shown in Figures 2 , 3 , a frontal-distributed FRN-like component was observed both after choice and feedback presentations. The typical FRN appears at the frontal-central area and begins at about 200 ms after the outcome stimuli ( Gehring and Willoughby, 2002 ; Zhou et al, 2010 ; Chen et al, 2012 ; Wang L. et al, 2016 ; Zheng et al, 2021 ). Therefore, the FRN during 250 ms to 350 ms at the fronto-central area (F1, Fz, F2, FC1, FCz, and FC2) was chosen for analyses of choice and feedback evaluations.…”

“…Thus, consistent social information is generally regarded as a reward signal ( Campbell-Meiklejohn et al, 2010 ; Zaki et al, 2011 ), while social information on inconsistency with others may bring about emotional and cognitive conflicts ( Klucharev et al, 2011 ; Yu and Sun, 2013 ). This conflict would be processed as a negative feedback and then reflect in the magnitude of the feedback-related negativity (FRN) ( Wang et al, 2019 ; Zheng et al, 2021 ). In early studies the valence effect on FRN was demonstrated mainly in studies adopting monetary rewards tasks ( Gehring and Willoughby, 2002 ; Yeung and Sanfey, 2004 ; Liao et al, 2011 ; San Martín, 2012 ), with the loss condition eliciting a larger FRN than the gain condition ( Yu et al, 2007 ; Ma et al, 2011 ; Wang Y. et al, 2016 ; Qi et al, 2018 ).…”

“…For example, in a recent study, the researchers asked two anonymous same-sex players to work on a knowledge quiz task, and found that inconsistent answers with the partner make the participants feel more uncertain about their own responses, resulting in a larger FRN ( Wang et al, 2018 ). Similarly, Zheng et al (2021) modified the task of Klucharev et al (2009) by introducing the crowdfunding context and found that deviation of the individual rating from the group rating evokes a significantly more negative FRN. Given that the above findings are illuminating, most existing studies examined the (in)consistency effect by comparing one’s behavior or opinion with the whole group’s.…”

“…To sum up, decision consistency with others is a piece of important social information. Previous studies have begun to uncover the evaluation process of such social information itself ( Klucharev et al, 2009 ; Nook and Zaki, 2015 ; Wang et al, 2019 ; Zheng et al, 2021 ) as well as its influence on the following outcome evaluation ( Gehring and Willoughby, 2002 ; Yeung and Sanfey, 2004 ; Bellebaum et al, 2010 ; Foti et al, 2011 ; Liao et al, 2011 ; San Martín, 2012 ). Our study aims to extend this line of studies by examining the effect of decision consistency in a social context where individual decisions are compared to those of the counterpart rather than a whole group.…”