Today I read a paper recently written by Bursztyn, 2021 saying that
The origin, persistence, and rigidity of misperceptions about others can in principle be explained by different conceptual frameworks, such as stereotyping (e.g., Bordalo et al. 2016), motivated reasoning (e.g., Benabou and Tirole 2016), and pluralistic ignorance (e.g., Kuran 1997; Bursztyn, Egorov and Fiorin 2020; Bursztyn, Gonz´alez and Yanagizawa-Drott 2020)
From what I understand, pluralistic ignorance is
the situation in which almost all members of a group privately reject group norms, yet believe that virtually all other group members accept them
However, I still not yet got the idea of this behaviour, could you give me an example in economic or finance to understand it more?
Update: Adding a great explaination of "pluralistic ignorance" as suggested by @Lason
The term “pluralistic ignorance” was coined to describe the situation in which almost all members of a group privately reject group norms, yet believe that virtually all other group members accept them (Katz and Allport, 1931). Under such situations, individuals predict that they would lose social standing if they behaved as they wished. Behaving against the group norm could result in negative reactions from other ingroup members. Therefore, people are likely to follow perceived group norms to maintain positive impressions in their groups, even when they do not support the norms (Miller and McFarland, 1987; Miller and Prentice, 1994; Prentice and Miller, 1996; Geiger and Swim, 2016). In line with this idea, in situations of pluralistic ignorance, some people even actively enforce the perceived norms (i.e., publicly criticizing a “misfit” into accepting the norm), although they privately disapprove of the norms (Willer et al., 2009). Consequently, public behaviors of groups as a whole do not coincide with the majority of group members' private preferences under circumstances of pluralistic ignorance. Thus, the situation of pluralistic ignorance is well represented in the following sentence: “No one believes, but everyone believes that everyone else believes” (Krech and Crutchfield, 1948).