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An Experimental Test of Advice and Social Learning

Author

Listed:
  • Bou{g}açhan Çelen

    (Graduate School of Business, Columbia University, New York, New York 10027)

  • Shachar Kariv

    (Department of Economics, University of California, Berkeley, Berkeley, California 94720)

  • Andrew Schotter

    (Department of Economics, New York University, New York, New York 10012)

Abstract

Social learning describes any situation in which individuals learn by observing the behavior of others. In the real world, however, individuals learn not just by observing the actions of others but also from seeking advice. This paper introduces advice giving into the standard social-learning experiment of Çelen and Kariv (Çelen, B., S. Kariv. 2005. An experimental test of observational learning under imperfect information. Econom. Theory 26(3) 677-699). The experiments are designed so that both pieces of information--action and advice--are equally informative (in fact, identical) in equilibrium. Despite the informational equivalence of advice and actions, we find that subjects in a laboratory social-learning situation appear to be more willing to follow the advice given to them by their predecessor than to copy their action, and that the presence of advice increases subjects' welfare.

Suggested Citation

  • Bou{g}açhan Çelen & Shachar Kariv & Andrew Schotter, 2010. "An Experimental Test of Advice and Social Learning," Management Science, INFORMS, vol. 56(10), pages 1687-1701, October.
  • Handle: RePEc:inm:ormnsc:v:56:y:2010:i:10:p:1687-1701
    DOI: 10.1287/mnsc.1100.1228
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