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Social Learning from Private Experiences: The Dynamics of the Selection Problem

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  • Charles F. Manski

Abstract

I analyse social interactions that stem from the successive endeavours of new cohorts of heterogeneous decision makers to learn from the experiences of past cohorts. A dynamic process of information accumulation and decision making occurs as the members of each cohort observe the experiences of earlier ones, and then make choices that yield experiences observable by future cohorts. Decision makers face the selection problem as they seek to learn from observation of past actions and outcomes, while not observing the counterfactual outcomes that would have occurred had other actions been chosen. Assuming that all cohorts face the same outcome distributions, I show that social learning is a process of sequential reduction in ambiguity. The specific nature of this process, and its terminal state, depend critically on how decision makers make choices under ambiguity. I use the problem of learning about innovations to illustrate. Copyright 2004, Wiley-Blackwell.

Suggested Citation

  • Charles F. Manski, 2004. "Social Learning from Private Experiences: The Dynamics of the Selection Problem," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 71(2), pages 443-458.
    • Handle: RePEc:oup:restud:v:71:y:2004:i:2:p:443-458
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    File URL: http://hdl.handle.net/10.1111/0034-6527.00291
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    Cited by:

    1. Fabio David Nieto, 2016. "Discriminación y diferenciales de salarios en el mercado laboral," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 18(34), pages 115-134, January-J.
    2. Mengel, Friederike, 2008. "Matching structure and the cultural transmission of social norms," Journal of Economic Behavior & Organization, Elsevier, vol. 67(3-4), pages 608-623, September.
    3. Brice Romuald Gueyap Kounga, 2023. "Identification and Estimation of a Semiparametric Logit Model using Network Data," Papers 2310.07151, arXiv.org.
    4. Rafael Lalive & M. Alejandra Cattaneo, 2009. "Social Interactions and Schooling Decisions," The Review of Economics and Statistics, MIT Press, vol. 91(3), pages 457-477, August.
    5. Franklin Simtowe & Solomon Asfaw & Tsedeke Abate, 2016. "Determinants of agricultural technology adoption under partial population awareness: the case of pigeonpea in Malawi," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 4(1), pages 1-21, December.
    6. Charles F. Manski, 2014. "Choosing Size of Government Under Ambiguity: Infrastructure Spending and Income Taxation," Economic Journal, Royal Economic Society, vol. 0(576), pages 359-376, May.
    7. Galichon, Alfred & Henry, Marc, 2009. "A test of non-identifying restrictions and confidence regions for partially identified parameters," Journal of Econometrics, Elsevier, vol. 152(2), pages 186-196, October.
    8. Galichon, Alfred & Henry, Marc, 2013. "Dilation bootstrap," Journal of Econometrics, Elsevier, vol. 177(1), pages 109-115.
    9. Michael Lechner & Ruth Miquel, 2010. "Identification of the effects of dynamic treatments by sequential conditional independence assumptions," Empirical Economics, Springer, vol. 39(1), pages 111-137, August.
    10. Schanne, Norbert, 2012. "The formation of experts' expectations on labour markets : do they run with the pack?," IAB-Discussion Paper 201225, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    11. Manski, Charles F., 2013. "Public Policy in an Uncertain World: Analysis and Decisions," Economics Books, Harvard University Press, number 9780674066892, Spring.
    12. Samuli Leppälä, 2015. "Economic Analysis Of Knowledge: The History Of Thought And The Central Themes," Journal of Economic Surveys, Wiley Blackwell, vol. 29(2), pages 263-286, April.
    13. William A. Brock & Steven N. Durlauf, 2010. "Adoption Curves and Social Interactions," Journal of the European Economic Association, MIT Press, vol. 8(1), pages 232-251, March.
    14. Simon Gleyze & Philippe Jehiel, 2023. "Expectation Formation, Local Sampling and Belief Traps: A new Perspective on Education Choices," Working Papers halshs-04154324, HAL.
    15. Leiter, Debra & Murr, Andreas & Rascón Ramírez, Ericka & Stegmaier, Mary, 2018. "Social networks and citizen election forecasting: The more friends the better," International Journal of Forecasting, Elsevier, vol. 34(2), pages 235-248.
    16. Bryan S. Graham, 2014. "An econometric model of link formation with degree heterogeneity," NBER Working Papers 20341, National Bureau of Economic Research, Inc.
    17. H. Peyton Young, 2009. "Innovation Diffusion in Heterogeneous Populations: Contagion, Social Influence, and Social Learning," American Economic Review, American Economic Association, vol. 99(5), pages 1899-1924, December.
    18. Linda Datcher Loury, 2006. "All in the Extended Family: Effects of Grandparents, Aunts, and Uncles on Educational Attainment," American Economic Review, American Economic Association, vol. 96(2), pages 275-278, May.
    19. Charles F. Manski, 2019. "Meta-Analysis for Medical Decisions," NBER Working Papers 25504, National Bureau of Economic Research, Inc.
    20. Nathan Yang, 2011. "An Empirical Model of Industry Dynamics with Common Uncertainty and Learning from the Actions of Competitors," Working Papers 11-16, NET Institute.
    21. Ethan Cohen-Cole & Giulio Zanella, 2008. "Welfare Stigma or Information Sharing? Decomposing Social Interactions Effects in Social Benefit Use," Department of Economics University of Siena 531, Department of Economics, University of Siena.
    22. Giulio Zanella, 2004. "Social Interactions and Economic Behavior," Department of Economics University of Siena 441, Department of Economics, University of Siena.
    23. Jan-Dirk Schmöcker & Tsuyoshi Hatori & David Watling, 2014. "Dynamic process model of mass effects on travel demand," Transportation, Springer, vol. 41(2), pages 279-304, March.

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