Social Influence: The Power of Monetary and Symbolic Social Rank

We study whether exogenously assigned rank makes advice more influential in an individual decision setting. People rely on rank cues when deciding whose advice to follow. Participants choose what share of an endowment to invest in a lottery that either triples the investment or reduces it to zero with equal probability. Before deciding, they receive unsolicited advice from a prior participant recommending to invest a proportion of the endowment. In the monetary treatment, the advisor is described as having randomly received either a low or high additional budget; in the star treatment, the advisor is randomly given one or two stars. In both cases, rank is explicitly random and therefore not informative about ability. Depending on the advisors' monetary or symbolic rank condition, the decision makers know that they are also randomly allocated an endowment or stars from the same set out of which the advisor's rank is selected. They are however not told which endowment size/number of stars they are allocated. This strategy allows the decision maker to perceive themselves as part of the same hierarchy as the advisors (the hierarchy matters), but avoids envy and rank-homophily. We measure the absolute distance between the participant’s choice and the advice received. Advice is restricted to 30% or 70% to reduce irrelevant variation and keep the content comparable across conditions. We hypothesize that advice from higher-ranked advisors will be followed more closely in both treatments, though possibly more strongly under monetary rank. Additional measures include cognitive reflection, social dominance orientation, recall, and perceptions of the advice. The main analysis estimates pooled and treatment-specific models, with a double-bounded Tobit as the primary specification and OLS and probit as robustness checks.