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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. Apesteguia, Jose & Huck, Steffen & Oechssler, Joerg, 2003. "Imitation - Theory and Experimental Evidence," University of California at Santa Barbara, Economics Working Paper Series qt3h0887tj, Department of Economics, UC Santa Barbara.
  2. 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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  5. Steffen Huck & Hans-Theo Normann & Joerg Oechssler, 1997. "Learning in Cournot Oligopoly - An Experiment," Game Theory and Information 9707009, EconWPA, revised 22 Jul 1997.
  6. Fernando Vega-Redondo, 1997. "The Evolution of Walrasian Behavior," Econometrica, Econometric Society, vol. 65(2), pages 375-384, March.
  7. 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.
  8. 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.
  9. Holt, Charles A & Sherman, Roger, 1994. "The Loser's Curse," American Economic Review, American Economic Association, vol. 84(3), pages 642-52, June.
  10. Nick Feltovich & John Duffy, 1999. "Does observation of others affect learning in strategic environments? An experimental study," International Journal of Game Theory, Springer;Game Theory Society, vol. 28(1), pages 131-152.
  11. Schlag, Karl H., 1999. "Which one should I imitate?," Journal of Mathematical Economics, Elsevier, vol. 31(4), pages 493-522, May.
  12. 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.
  13. Boğaçhan Çelen & Shachar Kariv, 2005. "An experimental test of observational learning under imperfect information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 26(3), pages 677-699, October.
  14. 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.
  15. 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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  17. Fudenberg, Drew & Ellison, Glenn, 1995. "Word-of-Mouth Communication and Social Learning," Scholarly Articles 3196300, Harvard University Department of Economics.
  18. 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.
  19. Colin F. Camerer, 1997. "Progress in Behavioral Game Theory," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 167-188, Fall.
  20. Theo Offerman & Jan Potters & Joep Sonnemans, 1997. "Imitation and Belief Learning in an Oligopoly Experiment," Tinbergen Institute Discussion Papers 97-116/1, Tinbergen Institute.
  21. Celen, Bogachan & Kariv, Shachar, 2004. "Observational learning under imperfect information," Games and Economic Behavior, Elsevier, vol. 47(1), pages 72-86, April.
  22. 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.
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  26. 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.
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