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Learning from the Experiments of Others Simultaneous Search, Coordination in R&D and Diffusion Processes: Laboratory Evidence


Author Info

  • Niels D. Grosse

    (DFG Research Training Group "The Economics of Innovative Change", Friedrich-Schiller-University, Jena)

  • Oliver Kirchkamp

    (School for Economics and Business Administration, Friedrich-Schiller-University, Jena)


In this paper we are studying a multiple player two-armed bandit model with two risky arms in discrete time. Players have to find the superior arm and can learn from others' history of choices and successes. In equilibrium, there is no con?ict between individual and social rationality. If agents depart from perfect rationality and use count heuristics, they can benefit from coordination (or centralization) of search activities. We test the conjecture that agents gain from coordination with a between-subject design in two treatments. In the experiments we find no gains from coordination. Instead, we find less severe deviations from the equilibrium strategy in the non-coordinated treatment.

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Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2009-065.

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Date of creation: 06 Aug 2009
Date of revision:
Handle: RePEc:jrp:jrpwrp:2009-065

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Keywords: two-armed bandit; parallel search; coordination; experiment;

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