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Imitation and luck: An experimental study on social sampling

  • Offerman, Theo
  • Schotter, Andrew

In this paper, we present the results of two experiments on social sampling, where people make a risky decision after they have sampled the behavior of others who have done exactly the same problem before them. In an individual decision making problem as well as in the takeover game, the simple behavioral rule of imitating the best appears to be a robust description of behavior despite the fact that it is not optimal in any of the experimental tasks. Social sampling makes people look more risk seeking than the people who do not have the opportunity to sample.

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File URL: http://www.sciencedirect.com/science/article/B6WFW-4S50K6K-1/2/3447416f2b9db37d71e18d1abecfbcd1
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Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 65 (2009)
Issue (Month): 2 (March)
Pages: 461-502

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Handle: RePEc:eee:gamebe:v:65:y:2009:i:2:p:461-502
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622836

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  1. Offerman, T.J.S. & Potters, J.J.M. & Sonnemans, J., 2002. "Imitation and belief learning in an oligopoly experiment," Other publications TiSEM a6a771c5-31ba-4193-8f76-a, School of Economics and Management.
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  5. Reinhard Selten & Jose Apesteguia, 2002. "Experimentally Observed Imitation and Cooperation in Price Competition on the Circle," Bonn Econ Discussion Papers bgse19_2002, University of Bonn, Germany.
  6. Matthew Rabin, 2001. "Inference by Believers in the Law of Small Numbers," Method and Hist of Econ Thought 0012002, EconWPA.
  7. Ellison, Glenn & Fudenberg, Drew, 1995. "Word-of-Mouth Communication and Social Learning," The Quarterly Journal of Economics, MIT Press, vol. 110(1), pages 93-125, February.
  8. Reinhard Selten & Klaus Abbink & Ricarda Cox, 2001. "Learning Direction Theory and the Winner’s Curse," Bonn Econ Discussion Papers bgse10_2001, University of Bonn, Germany.
  9. Schlag, Karl H., 1994. "Why Imitate, and if so, How? Exploring a Model of Social Evolution," Discussion Paper Serie B 296, University of Bonn, Germany.
  10. John Duffy & Tatiana Kornienko, 2006. "Does Competition Affect Giving?," Working Papers 275, University of Pittsburgh, Department of Economics, revised Apr 2009.
  11. Fernando Vega-Redondo, 1997. "The Evolution of Walrasian Behavior," Econometrica, Econometric Society, vol. 65(2), pages 375-384, March.
  12. Karl H. Schlag, . "Why Imitate, and if so, How? A Bounded Rational Approach to Multi- Armed Bandits," ELSE working papers 028, ESRC Centre on Economics Learning and Social Evolution.
  13. Offerman, Theo & Sonnemans, Joep, 1998. "Learning by experience and learning by imitating successful others," Journal of Economic Behavior & Organization, Elsevier, vol. 34(4), pages 559-575, March.
  14. Anderson, Lisa R & Holt, Charles A, 1997. "Information Cascades in the Laboratory," American Economic Review, American Economic Association, vol. 87(5), pages 847-62, December.
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  17. Celen, Bogachan & Kariv, Shachar, 2004. "Observational learning under imperfect information," Games and Economic Behavior, Elsevier, vol. 47(1), pages 72-86, April.
  18. repec:ner:tilbur:urn:nbn:nl:ui:12-91663 is not listed on IDEAS
  19. Theo Offerman & Joep Sonnemans, 2004. "What's Causing Overreaction? An Experimental Investigation of Recency and the Hot-hand Effect," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(3), pages 533-554, October.
  20. repec:cup:cbooks:9780521003117 is not listed on IDEAS
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  22. Abbink, Klaus & Brandts, Jordi, 2008. "24. Pricing in Bertrand competition with increasing marginal costs," Games and Economic Behavior, Elsevier, vol. 63(1), pages 1-31, May.
  23. Boğaçhan Çelen & Shachar Kariv, 2005. "An experimental test of observational learning under imperfect information," Economic Theory, Springer, vol. 26(3), pages 677-699, October.
  24. Hofbauer, Josef & Karl H. Schlag, . "Sophisticated Imitation in Cyclic Games," Discussion Paper Serie B 427, University of Bonn, Germany, revised Mar 1998.
  25. Schlag, Karl H., 1996. "Which one should I imitate?," Discussion Paper Serie B 365, University of Bonn, Germany.
  26. Rustichini, Aldo, 1999. "Optimal Properties of Stimulus--Response Learning Models," Games and Economic Behavior, Elsevier, vol. 29(1-2), pages 244-273, October.
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  28. Colin F. Camerer, 1997. "Progress in Behavioral Game Theory," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 167-188, Fall.
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