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Imitation and luck: An experimental study on social sampling

Listed author(s):
  • 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. 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.
  2. 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.
  3. Schlag, Karl H., 1999. "Which one should I imitate?," Journal of Mathematical Economics, Elsevier, vol. 31(4), pages 493-522, May.
  4. Theo Offerman & Jan Potters & Joep Sonnemans, 1997. "Imitation and Belief Learning in an Oligopoly Experiment," Tinbergen Institute Discussion Papers 97-116/1, Tinbergen Institute.
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  7. 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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  9. Gilboa,Itzhak & Schmeidler,David, 2001. "A Theory of Case-Based Decisions," Cambridge Books, Cambridge University Press, number 9780521003117, December.
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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. 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.
  13. 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.
  14. 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.
  15. Fernando Vega-Redondo, 1997. "The Evolution of Walrasian Behavior," Econometrica, Econometric Society, vol. 65(2), pages 375-384, March.
  16. Josef Hofbauer & Karl H. Schlag, 2000. "Sophisticated imitation in cyclic games," Journal of Evolutionary Economics, Springer, vol. 10(5), pages 523-543.
  17. Colin F. Camerer, 1997. "Progress in Behavioral Game Theory," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 167-188, Fall.
  18. John Duffy & Nick Feltovich, 1997. "Does Observation of Others Affect Learning in Strategic Environments? An Experimental Study," Levine's Working Paper Archive 592, David K. Levine.
  19. Rustichini, Aldo, 1999. "Optimal Properties of Stimulus--Response Learning Models," Games and Economic Behavior, Elsevier, vol. 29(1-2), pages 244-273, October.
  20. Celen, Bogachan & Kariv, Shachar, 2004. "Observational learning under imperfect information," Games and Economic Behavior, Elsevier, vol. 47(1), pages 72-86, April.
  21. Bogaçhan Çelen & Shachar Kariv, 2004. "Distinguishing Informational Cascades from Herd Behavior in the Laboratory," American Economic Review, American Economic Association, vol. 94(3), pages 484-498, June.
  22. Reinhard Selten & Klaus Abbink & Ricarda Cox, 2005. "Learning Direction Theory and the Winner’s Curse," Experimental Economics, Springer;Economic Science Association, vol. 8(1), pages 5-20, April.
  23. repec:pit:wpaper:275 is not listed on IDEAS
  24. 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.
  25. 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.
  26. Selten, Reinhard & Apesteguia, Jose, 2005. "Experimentally observed imitation and cooperation in price competition on the circle," Games and Economic Behavior, Elsevier, vol. 51(1), pages 171-192, April.
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