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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/pii/S0899-8256(08)00063-8
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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. 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.
  2. Jose Apesteguia & Steffen Huck & Jorg Oechssler, 2004. "Imitation - Theory and Experimental Evidence," Levine's Bibliography 122247000000000132, UCLA Department of Economics.
  3. Josef Hofbauer & Karl H. Schlag, 2000. "Sophisticated imitation in cyclic games," Journal of Evolutionary Economics, Springer, vol. 10(5), pages 523-543.
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  7. Anderson, Lisa R & Holt, Charles A, 1997. "Information Cascades in the Laboratory," American Economic Review, American Economic Association, vol. 87(5), pages 847-862, December.
  8. 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.
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  11. Karl H. Schlag, 1995. "Why Imitate, and if so, How? A Bounded Rational Approach to Multi-Armed Bandits," Discussion Paper Serie B 361, University of Bonn, Germany, revised Mar 1996.
  12. Itzhak Gilboa & David Schmeidler, 2001. "A Theory of Case-Based Decisions," Post-Print hal-00756321, HAL.
  13. Fernando Vega-Redondo, 1997. "The Evolution of Walrasian Behavior," Econometrica, Econometric Society, vol. 65(2), pages 375-384, March.
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  15. Schlag, Karl H., 1999. "Which one should I imitate?," Journal of Mathematical Economics, Elsevier, vol. 31(4), pages 493-522, May.
  16. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
  17. 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.
  18. K. Schlag, 2010. "Why Imitate, and if so, How? Exploring a Model of Social Evolution," Levine's Working Paper Archive 454, David K. Levine.
  19. Matthew Rabin, 2002. "Inference by Believers in the Law of Small Numbers," The Quarterly Journal of Economics, Oxford University Press, vol. 117(3), pages 775-816.
  20. Steffen Huck & Hans-Theo Normann & Joerg Oechssler, 1997. "Learning in Cournot Oligopoly - An Experiment," Game Theory and Information 9707009, EconWPA, revised 22 Jul 1997.
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