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Observational Learning with Position Uncertainty

  • Ignacio Monzon
  • Michael Rapp

Observational learning is typically examined when agents have precise information about their position in the sequence of play. We present a model in which agents are uncertain about their positions. Agents are allowed to have arbitrary ex-ante beliefs about their positions: they may observe their position perfectly, imperfectly, or not at all. Agents sample the decisions of past individuals and receive a private signal about the state of the world. We show that social learning is robust to position uncertainty. Under any sampling rule satisfying a stationarity assumption, learning is complete if signal strength is unbounded. In cases with bounded signal strength, we show that agents achieve what we define as constrained efficient learning: individuals do at least as well as the most informed agent would do in isolation.

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File URL: http://www.carloalberto.org/assets/working-papers/no.206.pdf
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Paper provided by Collegio Carlo Alberto in its series Carlo Alberto Notebooks with number 206.

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Length: 39 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:cca:wpaper:206
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  1. James S. Costain, 2003. "A Herding Perspective On Global Games And Multiplicity," Economics Working Papers we032908, Universidad Carlos III, Departamento de Economía.
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  9. Kenneth Hendricks & Alan Sorensen & Thomas Wiseman, 2012. "Observational Learning and Demand for Search Goods," American Economic Journal: Microeconomics, American Economic Association, vol. 4(1), pages 1-31, February.
  10. Larson, Nathan, 2008. "Inertia in social learning from a summary statistic," MPRA Paper 32143, University Library of Munich, Germany, revised Jul 2011.
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  12. Callander, Steven & Hörner, Johannes, 2009. "The wisdom of the minority," Journal of Economic Theory, Elsevier, vol. 144(4), pages 1421-1439.e, July.
  13. Daron Acemoglu & Munther A. Dahleh & Ilan Lobel & Asuman Ozdaglar, 2008. "Bayesian Learning in Social Networks," NBER Working Papers 14040, National Bureau of Economic Research, Inc.
  14. Guarino, Antonio & Harmgart, Heike & Huck, Steffen, 2011. "Aggregate information cascades," Games and Economic Behavior, Elsevier, vol. 73(1), pages 167-185, September.
  15. Herrera, Helios & Hörner, Johannes, 2013. "Biased social learning," Games and Economic Behavior, Elsevier, vol. 80(C), pages 131-146.
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