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Belief Updating in Individual and Social Learning: A Field Experiment on the Internet

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  • Shunichiro Sasaki
  • Toshiji Kawagoe

Abstract

We conducted a field experiment on the Internet and investigated the participants' belief updating in an individual learning environment where they observe a sequence of private signals and in a social learning environment where they observe a sequence of other people's actions. We observed that participants do not update their posterior beliefs as efficiently as Bayesian, and that participants rely more on private signals than on other people's actions even when the informativeness of both is identical. Furthermore, we confirmed that participant's trust in other people's actions and their conformity to other people's actions are affected by their demographic characteristics.

Suggested Citation

  • Shunichiro Sasaki & Toshiji Kawagoe, 2007. "Belief Updating in Individual and Social Learning: A Field Experiment on the Internet," ISER Discussion Paper 0690, Institute of Social and Economic Research, Osaka University.
  • Handle: RePEc:dpr:wpaper:0690
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    File URL: http://www.iser.osaka-u.ac.jp/library/dp/2007/DP0690.pdf
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    References listed on IDEAS

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    1. Markus Noth & Martin Weber, 2003. "Information Aggregation with Random Ordering: Cascades and Overconfidence," Economic Journal, Royal Economic Society, vol. 113(484), pages 166-189, January.
    2. Angela A. Hung & Charles R. Plott, 2001. "Information Cascades: Replication and an Extension to Majority Rule and Conformity-Rewarding Institutions," American Economic Review, American Economic Association, vol. 91(5), pages 1508-1520, December.
    3. 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.
    4. Anderson, Lisa R & Holt, Charles A, 1997. "Information Cascades in the Laboratory," American Economic Review, American Economic Association, vol. 87(5), pages 847-862, December.
    5. repec:ebl:ecbull:v:3:y:2006:i:11:p:1-11 is not listed on IDEAS
    6. Angela Hung & Jeff Dominitz, 2004. "Homogeneous Actions and Hetergeneous Beliefs: Experimental Evidence on the Formation of Information Cascades," Econometric Society 2004 North American Winter Meetings 64, Econometric Society.
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    Cited by:

    1. Daniel J. Benjamin & Matthew Rabin & Collin Raymond, 2016. "A Model Of Nonbelief In The Law Of Large Numbers," Journal of the European Economic Association, European Economic Association, vol. 14(2), pages 515-544, April.

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