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Inertia in social learning from a summary statistic

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  • Larson, Nathan

Abstract

We model normal-quadratic social learning with agents who observe a summary statistic over past actions, rather than complete action histories. Because an agent with a summary statistic cannot correct for the fact that earlier actions influenced later ones, even a small presence of old actions in the statistic can introduce very persistent errors. Depending on how fast these old actions fade from view, social learning can either be as fast as if agents’ private information were pooled (rate n) or it can slow to a crawl (rate ln n). We also examine extensions to learning from samples of actions, learning about a moving target, heterogeneous preferences, and biases toward own information.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 32143.

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Date of creation: 2008
Date of revision: Jul 2011
Handle: RePEc:pra:mprapa:32143

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Related research

Keywords: social learning; herding; speed of learning;

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References

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Cited by:
  1. Vincent Mak & Rami Zwick, 2014. "Experimenting and learning with localized direct communication," Experimental Economics, Springer, Springer, vol. 17(2), pages 262-284, June.

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