Blog

Strangers on a train - Why the concept of 'pluralistic ignorance' really is not bliss

09/09/2014

Ian Kelly

Ian Kelly

Fund Manager, Equity Value

In their recent paper Mistakenly seeking solitude, Nicholas Epley and Juliana Schroeder of the University of Chicago describe an experiment in which, one morning, they recruited 118 commuters at a suburban railway station and randomly divided them into three groups, which were assigned the conditions of ‘connection’, ‘’solitude’ and ‘control’.

The ‘connection’ group were told: “please have a conversation with a new person on the train today. Try to make a connection. Find out something interesting about him or her and tell them something about you. The longer the conversation, the better. Your goal is to get to know your ‘community neighbour’ this morning.”

For their part, the ‘solitude’ group were told: “please keep to yourself and enjoy your solitude on the train today. Take this time to sit alone with your thoughts. Your goal is to focus on yourself and the day ahead of you.” the ‘control’ group meanwhile simply had to carry on as they normally would on their daily commute.

All of the participants were given a questionnaire to fill in at the end of their journey, in which they were asked to describe what they had done and then to complete three measures to assess “the overall positivity of their commute” – how happy or sad they felt afterwards and then not only how pleasant but also how productive the journey had been compared with their normal commute.

Then, in a parallel experiment, the researchers recruited 105 commuters and divided them into the same three groups but this time asked them simply how they thought they would expect to feel if they had been asked to strike up a conversation with a stranger, stay silent for the whole journey or just behave as they would on their normal commute.

Predictably enough, those who only had to imagine having to talk to a stranger expected they would feel more negative while those who only had to imagine keeping silent expected they would feel more positive. And equally predictably – otherwise there would be little point to this article – in reality, the complete opposite turned out to be true.

As you can see from the chart below, both the actual positivity (top panel) and the actual productivity (bottom panel) of the ‘connection’ group were in positive territory. The average length of the conversation held with a stranger was 15 minutes and every participant, whether they considered themselves to be chatty or shy, reported feeling happier at the end of their commute.

 

What we are seeing here is something called ‘pluralistic ignorance’ – essentially a very widespread misapprehension. the pluralistic ignorance highlighted by the commuter experiment is the – incorrect – assumption that, while you yourself may be happy to talk to strangers on a train, nobody else thinks like you and so you stare at your paper or your shoes and miss out on a potentially positive experience.

Examples of pluralistic ignorance are to be found everywhere in life and, generally speaking; its consequences tend to be negative. In a business context, for instance, it could involve the director of a company seeing something going horribly wrong but not speaking up because they mistakenly assume all their fellow board members must be ok with the situation. While the group has a unified belief, each individual quietly assumes that they are alone in dissenting – and chooses to remain silent.

Or, to bring the idea squarely within the realm of The Value Perspective, pluralistic ignorance could involve an investor spotting the share price of a cheap company becoming even cheaper and deciding not to buy in because they mistakenly assume everyone else in the market must know something the investor does not.

The reality of course is that individuals, in and of themselves, have the ability to make positive and productive decisions. For investors prepared to back their judgement and take advantage of the widespread misapprehensions of the broader market, things can work out very positively indeed.

 

Author

Ian Kelly

Ian Kelly

Fund Manager, Equity Value

I joined Schroders European equity research team in 2007 as an analyst specialising in automobiles. After two years I added the insurance sector to my coverage. In early 2010 I moved into a fund management role, and then took over management of two offshore funds investing in European and Global companies seeking to offer income and capital growth. 

Important Information:

The views and opinions displayed are those of Ian Kelly, Nick Kirrage, Andrew Lyddon, Kevin Murphy, Andrew Williams, Andrew Evans and Simon Adler, members of the Schroder Global Value Equity Team (the Value Perspective Team), and other independent commentators where stated. They do not necessarily represent views expressed or reflected in other Schroders' communications, strategies or funds. The Team has expressed its own views and opinions on this website and these may change.

This article is intended to be for information purposes only and it is not intended as promotional material in any respect. Reliance should not be placed on the views and information on the website when taking individual investment and/or strategic decisions. Nothing in this article should be construed as advice. The sectors/securities shown above are for illustrative purposes only and are not to be considered a recommendation to buy/sell.

Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested.