The Friendship Paradox and Systematic Biases in Perceptions and Social Norms

The “friendship paradox” (Feld (1991)) refers to the fact that, on average, people have strictly fewer friends than their friends have. I show that this over-sampling of the most popular people amplifies behaviors that involve complementarities. People with more friends experience greater complementarities and hence take more extreme actions. Given the friendship paradox, people then perceive more extreme behavior when sampling their friends than exists in the overall population. Given the complementarities, this feeds back to amplify average behavior. In addition, people with the greatest innate proclivity to take high actions also tend to be the ones who choose to interact the most, leading to further feedback and amplification. These results are consistent with studies finding that people consistently overestimate peer consumption of alcohol, cigarettes, and drugs; and, can help explain problems with adolescent abuse of drugs and binge-drinking, as well as other behaviors. I also discuss how these results change in cases of strategic substitutes, where individuals overestimate free-riding by peers. JEL Classification Codes: D85, D13, L14, O12, Z13