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Error Cascades in Observational Learning: An Experiment on the Chinos Game

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Author Info
Francesco Feri ()
Miguel A. Meléndez-Jiménez ()
Giovanni Ponti ()
Fernando Vega Redondo ()

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Abstract

The paper reports an experimental study based on a variant of the popular Chinos game, which is used as a simple but paradigmatic instance of observational learning. There are three players, arranged in sequence, each of whom wins a fixed price if she manages to guess the total number of coins lying in everybody’s hands. Our evidence shows that, despite the remarkable frequency of equilibrium outcomes, deviations from optimal play are also significant. And when such deviations occur, we find that, for any given player position, the probability of a mistake is increasing in the probability of a mistake of her predecessors. This is what we call an error cascade, which we which we measure by way of two alternative models.

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Publisher Info
Paper provided by Faculty of Economics and Statistics, University of Innsbruck in its series Working Papers with number 2008-21.

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Length: 43
Date of creation: Sep 2008
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Handle: RePEc:inn:wpaper:2008-21

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Related research
Keywords: positional learning; error cascades;

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Find related papers by JEL classification:
C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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  18. Kennedy, Robert E, 2002. "Strategy Fads and Competitive Convergence: An Empirical Test for Herd Behavior in Prime-Time Television Programming," Journal of Industrial Economics, Blackwell Publishing, vol. 50(1), pages 57-84, March. [Downloadable!] (restricted)
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