To run with the herd or not: Electrophysiological dynamics are associated with preference change in crowdfunding

Abstract

The herd instinct is a common feature of human society and is frequently encountered in a myriad of other human social interaction including entertainment, fashion, and the adoption of new gadgets. Indeed, social influence, taking account of others' actions in one's decisions, is ubiquitous in our daily life. With the growing prevalence of crowdfunding investments, an increasing number of studies are currently focused on how social influences impact such behavior. Moreover, only a few studies have examined its neural correlates and the value of evaluating social influence as a possible predictor of herd behavior especially regarding crowdfunding. The present study aims to parse the neural processing of social influences on crowdfunding investment and examine whether neural signals can be correlated with an individuals' willingness to invest. Our results demonstrate that the greater ones' choice deviates from the overall group judgement, there is a resulting increased deflection of the feedback related negativity (FRN). However, the averaged and single trial analysis reveal that the subsequent P300, rather than the feedback related negativity, reflects the magnitude of social influence on individual behavior. Single trial analysis of the EEG data shows that, in addition to the behavioral manipulation, the deflection of the P300 is a robust signal, which is associated with the behavioral adjustment following an individual's awareness of the group opinion at the trial-by-trial level. The current study freshly extends the growing literature on social influences on decision making stemming from another's action to the new investment possibilities of crowdfunding investment and notably observes that the P300 component at the outcome stage evidently is associated with the behavioral-decision making shift evoked by following the herd.