Rules of Thumb for Social Learning
This paper studies agents who consider the experiences of their neighbors in deciding which of two technologies to use. The authors analyze two learning environments, one in which the same technology is optimal for all players and another in which each technology is better for some of them. In both environments, players use exogenously specified rules of thumb that ignore historical data but may incorporate a tendency to use the more popular technology. In some cases, these naive rules can lead to fairly efficient decisions in the long run but adjustment can be slow when a superior technology is first introduced. Copyright 1993 by University of Chicago Press.
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- Bikhchandani, Sushil & Hirshleifer, David & Welch, Ivo, 1992.
"A Theory of Fads, Fashion, Custom, and Cultural Change in Informational Cascades,"
Journal of Political Economy,
University of Chicago Press, vol. 100(5), pages 992-1026, October.
- Sushil Bikhchandani & David Hirshleifer & Ivo Welch, 2010. "A theory of Fads, Fashion, Custom and cultural change as informational Cascades," Levine's Working Paper Archive 1193, David K. Levine.
- Kandori, Michihiro & Mailath, George J & Rob, Rafael, 1993. "Learning, Mutation, and Long Run Equilibria in Games," Econometrica, Econometric Society, vol. 61(1), pages 29-56, January.
- Kandori, M. & Mailath, G.J., 1991. "Learning, Mutation, And Long Run Equilibria In Games," Papers 71, Princeton, Woodrow Wilson School - John M. Olin Program.
- M. Kandori & G. Mailath & R. Rob, 1999. "Learning, Mutation and Long Run Equilibria in Games," Levine's Working Paper Archive 500, David K. Levine.
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