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Informational externalities and emergence of consensus

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  • Rosenberg, Dinah
  • Solan, Eilon
  • Vieille, Nicolas

Abstract

We study a general model of dynamic games with purely informational externalities. We prove that eventually all motives for experimentation disappear, and provide the exact rate at which experimentation decays. We also provide tight conditions under which players eventually reach a consensus. These results imply extensions of many known results in the literature of social learning and getting to agreement.

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Bibliographic Info

Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 66 (2009)
Issue (Month): 2 (July)
Pages: 979-994

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Handle: RePEc:eee:gamebe:v:66:y:2009:i:2:p:979-994

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Web page: http://www.elsevier.com/locate/inca/622836

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  1. Banerjee, Abhijit & Fudenberg, Drew, 2004. "Word-of-mouth learning," Games and Economic Behavior, Elsevier, vol. 46(1), pages 1-22, January.
  2. Godfrey Keller & Martin Cripps, 2003. "Strategic Experimentation with Exponential Bandits," Economics Series Working Papers 143, University of Oxford, Department of Economics.
  3. Fudenberg, Drew & Ellison, Glenn, 1995. "Word-of-Mouth Communication and Social Learning," Scholarly Articles 3196300, Harvard University Department of Economics.
  4. Zwiebel, Jeffrey H. & Vayanos, Dimitri & DeMarzo, Peter M., 2001. "Persuasion Bias, Social Influence, and Uni-Dimensional Opinions," Research Papers 1719, Stanford University, Graduate School of Business.
  5. Martin W. Cripps & Larry Samuelson, 2004. "Disappearing Private Reputations in Long-Run Relationships," PIER Working Paper Archive 04-031, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 28 Jul 2004.
  6. Nielsen, Lars Tyge, 1984. "Common knowledge, communication, and convergence of beliefs," Mathematical Social Sciences, Elsevier, vol. 8(1), pages 1-14, August.
  7. Dinah Rosenberg & Eilon Solan & Nicolas Vieille, 2004. "Social Learning in One-Arm Bandit Problems," Discussion Papers 1396, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  8. Nielsen, Lars Tyge, et al, 1990. "Common Knowledge of an Aggregate of Expectations," Econometrica, Econometric Society, vol. 58(5), pages 1235-39, September.
  9. Lucie Ménager, 2005. "Consensus, Communication and Knowledge : an Extension with Bayesian Agents," Cahiers de la Maison des Sciences Economiques v05031, Université Panthéon-Sorbonne (Paris 1), revised Jan 2006.
  10. Patrick Bolton & Christopher Harris, 1999. "Strategic Experimentation," Econometrica, Econometric Society, vol. 67(2), pages 349-374, March.
  11. Parikh, Rohit & Krasucki, Paul, 1990. "Communication, consensus, and knowledge," Journal of Economic Theory, Elsevier, vol. 52(1), pages 178-189, October.
  12. Gale, Douglas & Kariv, Shachar, 2003. "Bayesian learning in social networks," Games and Economic Behavior, Elsevier, vol. 45(2), pages 329-346, November.
  13. Rosenberg, Dinah & Solan, Eilon & Vieille, Nicolas, 2010. "On the optimal amount of experimentation in sequential decision problems," Statistics & Probability Letters, Elsevier, vol. 80(5-6), pages 381-385, March.
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Citations

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Cited by:
  1. Klein, Nicolas & Rady, Sven, 2008. "Negatively Correlated Bandits," CEPR Discussion Papers 6983, C.E.P.R. Discussion Papers.
  2. Syngjoo Choi & Douglas Gale & Shachar Kariv, 2012. "Social learning in networks: a Quantal Response Equilibrium analysis of experimental data," Review of Economic Design, Springer, vol. 16(2), pages 135-157, September.
  3. Berno Buechel & Tim Hellmann & Stefan Kölßner, 2014. "Opinion Dynamics and Wisdom under Conformity," Working Papers 2014.51, Fondazione Eni Enrico Mattei.
  4. Rosenberg, Dinah & Solan, Eilon & Vieille, Nicolas, 2010. "On the optimal amount of experimentation in sequential decision problems," Statistics & Probability Letters, Elsevier, vol. 80(5-6), pages 381-385, March.
  5. Marco Pelliccia, 2013. "Ambiguous Networks," Birkbeck Working Papers in Economics and Finance 1303, Birkbeck, Department of Economics, Mathematics & Statistics.
  6. Mueller-Frank, Manuel, 2013. "A general framework for rational learning in social networks," Theoretical Economics, Econometric Society, vol. 8(1), January.
  7. Benjamin Golub & Matthew O. Jackson, 2010. "Na�ve Learning in Social Networks and the Wisdom of Crowds," American Economic Journal: Microeconomics, American Economic Association, vol. 2(1), pages 112-49, February.
  8. Jadbabaie, Ali & Molavi, Pooya & Sandroni, Alvaro & Tahbaz-Salehi, Alireza, 2012. "Non-Bayesian social learning," Games and Economic Behavior, Elsevier, vol. 76(1), pages 210-225.

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