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Naïve Learning in Social Networks and the Wisdom of Crowds

Author

Listed:
  • Benjamin Golub
  • Matthew O. Jackson

Abstract

We study learning in a setting where agents receive independent noisy signals about the true value of a variable and then communicate in a network. They naïvely update beliefs by repeatedly taking weighted averages of neighbors' opinions. We show that all opinions in a large society converge to the truth if and only if the influence of the most influential agent vanishes as the society grows. We also identify obstructions to this, including prominent groups, and provide structural conditions on the network ensuring efficient learning. Whether agents converge to the truth is unrelated to how quickly consensus is approached. (JEL D83, D85, Z13)

Suggested Citation

  • Benjamin Golub & Matthew O. Jackson, 2010. "Naïve Learning in Social Networks and the Wisdom of Crowds," American Economic Journal: Microeconomics, American Economic Association, vol. 2(1), pages 112-149, February.
    • Handle: RePEc:aea:aejmic:v:2:y:2010:i:1:p:112-49
    Note: DOI: 10.1257/mic.2.1.112
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    References listed on IDEAS

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    1. Coralio Ballester & Antoni Calvó-Armengol & Yves Zenou, 2006. "Who's Who in Networks. Wanted: The Key Player," Econometrica, Econometric Society, vol. 74(5), pages 1403-1417, September.
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    4. Leo Katz, 1953. "A new status index derived from sociometric analysis," Psychometrika, Springer;The Psychometric Society, vol. 18(1), pages 39-43, March.
    5. Choi, Syngjoo & Gale, Douglas & Kariv, Shachar, 2008. "Sequential equilibrium in monotone games: A theory-based analysis of experimental data," Journal of Economic Theory, Elsevier, vol. 143(1), pages 302-330, November.
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    More about this item

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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