Social Learning in a Changing World
In the social learning model of Banerjee  and Bikhchandani, Hirshleifer and Welch  individuals take actions sequentially after observing the history of actions taken by the predecessors and an informative private signal. If the state of the world is changing stochastically over time during the learning process, only temporary informational cascades situations where socially valuable information is wasted can arise. Furthermore, no cascade ever arises when the environment changes in a su�ciently unpredictable way.
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- Smith, L, 1996.
"Social Learning in a Changing World,"
96-34, Massachusetts Institute of Technology (MIT), Department of Economics.
- Smith, L. & Sorensen, P., 1996.
"Pathological Outcomes of Observational Learning,"
96-19, Massachusetts Institute of Technology (MIT), Department of Economics.
- RUSTICHINI, Aldo & WOLINSKYÂ , Asher, 1993.
"Learning about Variable Demand in the Long Run,"
CORE Discussion Papers
1993017, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Godfrey Keller & Sven Rady, 1999. "Optimal Experimentation in a Changing Environment," Review of Economic Studies, Oxford University Press, vol. 66(3), pages 475-507.
- Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 797-817.
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