Status Quo/Default option: Once the majority of students in a peer group aspire to university (herding behaviour and information cascades) the more likely the remaining students will treat going to university as the default option, being the status quo (default option: Johnson & Goldstein 2003, status quo: Samuelson & Zeckhauser 1988).
Incomplete information & pooling benefits: All students face varying degrees of uncertainty in their decision making about university. Individually, each will possess varying levels and types of information about the benefits and constraints of attending. The peer-effect on a student’s preference to attend university arises from the benefit of pooling information to reduce uncertainty. As more students aspire to and explore the opportunities of university, more information becomes available to the pool of students overall. As uncertainty decreases the more risk-adverse students will be inclined to attend university.
Socially Desirable: As more students within a peer-group aspire to university, the more salient the preference becomes. At a certain point, social desirability leads to an increased positive correlation of the preferences to attend university across the peer-group. Continue reading