WHAT'S FRIENDS' ADVICE WORTH?

The growth in social networking has also brought an increase in the use of advice networks. Some sites use friends’ advice for social marketing, others may offer recommendations from knowledgeable strangers. With this research, we seek to explore the value of the advice from friends and other informants, focusing on the change in a person’s belief (probability) about the usefulness (fit for purpose) of a product. An experimental study with 157 subjects shows that friend’s advice matters, however not significantly more than the advice of other informants, including strangers. The study also shows that people seek to increase their confidence and thus value confidence increasing information significantly more than confidence lowering information. When updating their beliefs, subjects appear to use simple anchor-and-adjust routines to determine posterior probabilities, rather than more complex probabilistic approaches.