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Informational externalities and emergence of consensus

  • Rosenberg, Dinah
  • Solan, Eilon
  • Vieille, Nicolas

We study a general model of dynamic games with purely informational externalities. We prove that eventually all motives for experimentation disappear, and provide the exact rate at which experimentation decays. We also provide tight conditions under which players eventually reach a consensus. These results imply extensions of many known results in the literature of social learning and getting to agreement.

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Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 66 (2009)
Issue (Month): 2 (July)
Pages: 979-994

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Handle: RePEc:eee:gamebe:v:66:y:2009:i:2:p:979-994
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622836

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  1. Gale, Douglas & Kariv, Shachar, 2003. "Bayesian learning in social networks," Games and Economic Behavior, Elsevier, vol. 45(2), pages 329-346, November.
  2. Martin W. Cripps & George J. Mailath & Larry Samuelson, 2004. "Disappearing Private Reputations in Long-Run Relationships," PIER Working Paper Archive 04-008, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  3. Nielsen, Lars Tyge, 1984. "Common knowledge, communication, and convergence of beliefs," Mathematical Social Sciences, Elsevier, vol. 8(1), pages 1-14, August.
  4. Godfrey Keller & Sven Rady & Martin Cripps, 2005. "Strategic Experimentation with Exponential Bandits," Econometrica, Econometric Society, vol. 73(1), pages 39-68, 01.
  5. Nielsen, Lars Tyge, et al, 1990. "Common Knowledge of an Aggregate of Expectations," Econometrica, Econometric Society, vol. 58(5), pages 1235-39, September.
  6. Menager, Lucie, 2006. "Consensus, communication and knowledge: An extension with Bayesian agents," Mathematical Social Sciences, Elsevier, vol. 51(3), pages 274-279, May.
  7. Abhijit Banerjee & Drew Fudenberg, 2010. "Word of Mouth Learning," Levine's Working Paper Archive 723, David K. Levine.
  8. A. Banerjee & Drew Fudenberg, 2010. "Word-of-Mouth Communication and Social Learning," Levine's Working Paper Archive 425, David K. Levine.
  9. Peter M. Demarzo & Dimitri Vayanos & Jeffrey Zwiebel, 2003. "Persuasion Bias, Social Influence, And Unidimensional Opinions," The Quarterly Journal of Economics, MIT Press, vol. 118(3), pages 909-968, August.
  10. Dinah Rosenberg & Eilon Solan & Nicolas Vieille, 2004. "Social Learning in One-Arm Bandit Problems," Discussion Papers 1396, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  11. Rosenberg, Dinah & Solan, Eilon & Vieille, Nicolas, 2010. "On the optimal amount of experimentation in sequential decision problems," Statistics & Probability Letters, Elsevier, vol. 80(5-6), pages 381-385, March.
  12. Patrick Bolton & Christopher Harris, 1999. "Strategic Experimentation," Econometrica, Econometric Society, vol. 67(2), pages 349-374, March.
  13. Parikh, Rohit & Krasucki, Paul, 1990. "Communication, consensus, and knowledge," Journal of Economic Theory, Elsevier, vol. 52(1), pages 178-189, October.
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