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Informational externalities and emergence of consensus

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

Abstract

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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  • Rosenberg, Dinah & Solan, Eilon & Vieille, Nicolas, 2009. "Informational externalities and emergence of consensus," Games and Economic Behavior, Elsevier, vol. 66(2), pages 979-994, July.
  • Handle: RePEc:eee:gamebe:v:66:y:2009:i:2:p:979-994
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    References listed on IDEAS

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    13. 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.
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    Cited by:

    1. Benjamin Golub & Matthew O. Jackson, 2010. "Naïve Learning in Social Networks and the Wisdom of Crowds," American Economic Journal: Microeconomics, American Economic Association, vol. 2(1), pages 112-149, February.
    2. Marco Pelliccia, 2013. "Ambiguous Networks," Birkbeck Working Papers in Economics and Finance 1303, Birkbeck, Department of Economics, Mathematics & Statistics.
    3. Buechel, Berno & Hellmann, Tim & Klößner, Stefan, 2015. "Opinion dynamics and wisdom under conformity," Journal of Economic Dynamics and Control, Elsevier, vol. 52(C), pages 240-257.
    4. Mueller-Frank, Manuel, 2015. "Reaching Consensus in Social Networks," IESE Research Papers D/1116, IESE Business School.
    5. Nicolas Klein & Sven Rady, 2011. "Negatively Correlated Bandits," Review of Economic Studies, Oxford University Press, vol. 78(2), pages 693-732.
    6. Mueller-Frank, Manuel, 2014. "Does one Bayesian make a difference?," Journal of Economic Theory, Elsevier, vol. 154(C), pages 423-452.
    7. Mueller-Frank, Manuel, 2013. "A general framework for rational learning in social networks," Theoretical Economics, Econometric Society, vol. 8(1), January.
    8. Jadbabaie, Ali & Molavi, Pooya & Sandroni, Alvaro & Tahbaz-Salehi, Alireza, 2012. "Non-Bayesian social learning," Games and Economic Behavior, Elsevier, vol. 76(1), pages 210-225.
    9. Wuggenig, Mirjam, 2015. "Learning faster or more precisely? Strategic experimentation in networks," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113196, Verein für Socialpolitik / German Economic Association.
    10. Azomahou, T. & Opolot, D., 2014. "Beliefs dynamics in communication networks," MERIT Working Papers 034, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    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. Syngjoo Choi & Douglas Gale & Shachar Kariv, 2012. "Social learning in networks: a Quantal Response Equilibrium analysis of experimental data," Review of Economic Design, Springer;Society for Economic Design, vol. 16(2), pages 135-157, September.
    13. Mueller-Frank, Manuel & Arieliy, Itai, 2015. "Social Learning and the Vanishing Value of Private Information," IESE Research Papers D/1119, IESE Business School.
    14. Camargo, Braz, 2014. "Learning in society," Games and Economic Behavior, Elsevier, vol. 87(C), pages 381-396.
    15. Mueller-Frank, Manuel & Arieliy, Itai, 2015. "A General Model of Boundedly Rational Observational Learning: Theory and Experiment," IESE Research Papers D/1120, IESE Business School.
    16. Wuggenig, Mirjam, 2014. "Learning faster or more precisely? Strategic experimentation in networks," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 485, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.

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