Do You Know Me? Consumer Calibration of Friends' Knowledge

A consumer's decision to rely on a friend to act as an agent depends, in part, on beliefs about the friend's knowledge. Three studies examine the role of motivational and cognitive biases in estimating friends' personalized knowledge (e.g., knowledge of one's movie preferences). Results show that estimates of close friends' knowledge are less accurate than those of less close friends for personalized but not for impersonal knowledge. Specifically, the studies show more overestimation of personalized knowledge and more bias in integrating new information for close as opposed to less close friends, supporting a motivational explanation for miscalibration of personalized knowledge.