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Value of History in Social Learning: Applications to Markets for History

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  • Hiroto Sato
  • Konan Shimizu

Abstract

In social learning environments, agents acquire information from both private signals and the observed actions of predecessors, referred to as history. We define the value of history as the gain in expected payoff from accessing both the private signal and history, compared to relying on the signal alone. We first characterize the information structures that maximize this value, showing that it is highest under a mixture of full information and no information. We then apply these insights to a model of markets for history, where a monopolistic data seller collects and sells access to history. In equilibrium, the seller's dynamic pricing becomes the value of history for each agent. This gives the seller incentives to increase the value of history by designing the information structure. The seller optimal information discloses less information than the socially optimal level.

Suggested Citation

  • Hiroto Sato & Konan Shimizu, 2025. "Value of History in Social Learning: Applications to Markets for History," Papers 2507.11029, arXiv.org.
    • Handle: RePEc:arx:papers:2507.11029
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    References listed on IDEAS

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    1. Michel De Lara & Olivier Gossner, 2017. "An instrumental approach to the value of information," Working Papers 2017-49, Center for Research in Economics and Statistics.
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    3. Navin Kartik & SangMok Lee & Tianhao Liu & Daniel Rappoport, 2024. "Beyond Unbounded Beliefs: How Preferences and Information Interplay in Social Learning," Econometrica, Econometric Society, vol. 92(4), pages 1033-1062, July.
    4. 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.
    5. Admati, Anat R. & Pfleiderer, Paul, 1986. "A monopolistic market for information," Journal of Economic Theory, Elsevier, vol. 39(2), pages 400-438, August.
    6. Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(3), pages 797-817.
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