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On the Efficiency of Social Learning

Author

Listed:
  • Dinah Rosenberg
  • Nicolas Vieille

Abstract

We revisit prominent learning models in which a sequence of agents make a binary decision on the basis of both a private signal and information related to past choices. We analyze the efficiency of learning in these models, measured in terms of the expected welfare. We show that, irrespective of the distribution of private signals, learning efficiency is the same whether each agent observes the entire sequence of earlier decisions or only the previous decision. In addition, we provide a simple condition on the signal distributions that is necessary and sufficient for learning efficiency. This condition fails to hold in many cases of interest. We discuss a number of extensions and variants.

Suggested Citation

  • Dinah Rosenberg & Nicolas Vieille, 2019. "On the Efficiency of Social Learning," Econometrica, Econometric Society, vol. 87(6), pages 2141-2168, November.
    • Handle: RePEc:wly:emetrp:v:87:y:2019:i:6:p:2141-2168
    DOI: 10.3982/ECTA15845
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    Cited by:

    1. Mira Frick & Ryota Iijima & Yuhta Ishii, 2021. "Learning Efficiency of Multi-Agent Information Structures," Cowles Foundation Discussion Papers 2299, Cowles Foundation for Research in Economics, Yale University.
    2. Sushil Bikhchandani & David Hirshleifer & Omer Tamuz & Ivo Welch, 2024. "Information Cascades and Social Learning," Journal of Economic Literature, American Economic Association, vol. 62(3), pages 1040-1093, September.
    3. Hiroto Sato & Ryo Shirakawa, 2025. "Allocating Common-Value Goods," Papers 2512.20001, arXiv.org, revised Apr 2026.
    4. Wanying Huang & Philipp Strack & Omer Tamuz, 2024. "Learning in Repeated Interactions on Networks," Econometrica, Econometric Society, vol. 92(1), pages 1-27, January.
    5. Florian Brandl & Wanying Huang & Atulya Jain, 2026. "On the Inefficiency of Social Learning," Papers 2602.08812, arXiv.org.
    6. Krishna Dasaratha & Kevin He, 2019. "Aggregative Efficiency of Bayesian Learning in Networks," Papers 1911.10116, arXiv.org, revised Feb 2026.
    7. Elchanan Mossel & Manuel Mueller‐Frank & Allan Sly & Omer Tamuz, 2020. "Social Learning Equilibria," Econometrica, Econometric Society, vol. 88(3), pages 1235-1267, May.
    8. Caio Lorecchio, 2022. "Persuading crowds," UB School of Economics Working Papers 2022/434, University of Barcelona School of Economics.
    9. Avidit Acharya & Kyungtae Park & Tomer Zaidman, 2025. "Motivated Reasoning and Information Aggregation," Papers 2512.10125, arXiv.org.
    10. Mira Frick & Ryota Iijima & Yuhta Ishii, 2020. "Belief Convergence under Misspecified Learning: A Martingale Approach," Cowles Foundation Discussion Papers 2235R2, Cowles Foundation for Research in Economics, Yale University, revised Dec 2021.
    11. Hann-Caruthers, Wade & Martynov, Vadim V. & Tamuz, Omer, 2018. "The speed of sequential asymptotic learning," Journal of Economic Theory, Elsevier, vol. 173(C), pages 383-409.
    12. Xu, Wenji, 2025. "Social learning through coarse signals of others' actions," Journal of Economic Theory, Elsevier, vol. 229(C).
    13. Aloosh, Arash & Choi, Hyung-Eun & Ouzan, Samuel, 2023. "The tail wagging the dog: How do meme stocks affect market efficiency?," International Review of Economics & Finance, Elsevier, vol. 87(C), pages 68-78.
    14. Xuanye Wang, 2021. "Fragility of Confounded Learning," Papers 2106.07712, arXiv.org.
    15. Mira Frick & Ryota Iijima & Yuhta Ishii, 2020. "Belief Convergence under Misspecified Learning: A Martingale Approach," Cowles Foundation Discussion Papers 2235R3, Cowles Foundation for Research in Economics, Yale University, revised Apr 2022.
    16. Yuxin Liu & M. Amin Rahimian, 2025. "Privacy-Aware Sequential Learning," Papers 2502.19525, arXiv.org, revised Sep 2025.
    17. Zhang, Min, 2021. "Non-monotone social learning," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 565-579.
    18. Arieli, Itai & Babichenko, Yakov & Smorodinsky, Rann, 2020. "Identifiable information structures," Games and Economic Behavior, Elsevier, vol. 120(C), pages 16-27.
    19. Mira Frick & Ryota Iijima & Yuhta Ishii, 2021. "Learning Efficiency of Multi-Agent Information Structures," Cowles Foundation Discussion Papers 2299R2, Cowles Foundation for Research in Economics, Yale University, revised Jul 2022.
    20. Chen, Fengwen & Wang, Bing & Wang, Wei & Hu, Chen, 2024. "The secret of imitating wrongdoing: Accidental or deliberate," Research in International Business and Finance, Elsevier, vol. 69(C).

    More about this item

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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