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On the Efficiency of Social Learning

Author

Listed:
  • Rosenberg, Dinah

  • Vieille, Nicolas

Abstract

We revisit well-known models of learning in which a sequence of agents make a binary decision on the basis of a private signal and additional information. We introduce efficiency measures, aimed at capturing the speed of learning in such contexts. Whatever the distribution of private signals, we show that the learning efficiency is the same, whether each agent observes the entire sequence of earlier decisions, or only the previous decision. We provide a simple necessary and sufficient condition on the signal distributions under which learning is efficient. This condition fails to hold in many prominent cases of interest. Extensions are discussed.

Suggested Citation

  • Rosenberg, Dinah & Vieille, Nicolas, 2017. "On the Efficiency of Social Learning," HEC Research Papers Series 1246, HEC Paris.
    • Handle: RePEc:ebg:heccah:1246
    DOI: 10.2139/ssrn.3081876
    Note: models of learning; Social Learning
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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 2299R, Cowles Foundation for Research in Economics, Yale University, revised Dec 2021.
    2. Elchanan Mossel & Manuel Mueller‐Frank & Allan Sly & Omer Tamuz, 2020. "Social Learning Equilibria," Econometrica, Econometric Society, vol. 88(3), pages 1235-1267, May.
    3. 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.
    4. Caio Lorecchio, 2022. "Persuading crowds," UB School of Economics Working Papers 2022/434, University of Barcelona School of Economics.
    5. 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.
    6. 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.
    7. Wanying Huang & Philipp Strack & Omer Tamuz, 2024. "Learning in Repeated Interactions on Networks," Econometrica, Econometric Society, vol. 92(1), pages 1-27, January.
    8. 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.
    9. Xuanye Wang, 2021. "Fragility of Confounded Learning," Papers 2106.07712, arXiv.org.
    10. 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.
    11. Yuxin Liu & M. Amin Rahimian, 2025. "Privacy-Aware Sequential Learning," Papers 2502.19525, arXiv.org, revised Sep 2025.
    12. Zhang, Min, 2021. "Non-monotone social learning," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 565-579.
    13. Krishna Dasaratha & Kevin He, 2019. "Aggregative Efficiency of Bayesian Learning in Networks," Papers 1911.10116, arXiv.org, revised Sep 2024.
    14. Arieli, Itai & Babichenko, Yakov & Smorodinsky, Rann, 2020. "Identifiable information structures," Games and Economic Behavior, Elsevier, vol. 120(C), pages 16-27.
    15. 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.
    16. 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

    Keywords

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    JEL classification:

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

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