The Influence of Authority on Economic Decision Making
Abstract
The purpose of the current research was to examine the influence of authority, including an authority figure and authoritative economic data, on economic decision-making. Participants were given one of two scenarios to read that included opposite suggestions by an authority figure and by economic data, prior to making an investment decision. Participants then completed the Choice-Dilemma Questionnaire to assess their risk-propensity and an economic knowledge test to categorize them as economically educated or naïve. The results indicated that there was no interaction between economic knowledge, the influence of the authority figure, or the influence of the data on investment decision. However, individuals did choose to invest significantly more when the authority figure suggested to invest in the stock. The results also suggest that risk-propensity had no significant influence on investment amount.