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Updating ambiguous beliefs in a social learning experiment

Author

Listed:
  • Roberta De Filippis

    (Institute for Fiscal Studies)

  • Antonio Guarino

    (Institute for Fiscal Studies)

  • Philippe Jehiel

    (Institute for Fiscal Studies)

  • Toru Kitagawa

    () (Institute for Fiscal Studies and cemmap and University College London)

Abstract

We present a social learning experiment in which subjects predict the value of a good in sequence. We elicit each subject’s belief twice: first (“first belief”), after he observes his predecessors’ prediction; second, after he also observes a private signal. Our main result is that subjects update on their signal asymmetrically. They weigh the private signal as a Bayesian agent when it confirms their first belief and overweight it when it contradicts their first belief. This way of updating, incompatible with Bayesianism, can be explained by ambiguous beliefs (multiple priors on the predecessor’s rationality) and a generalization of the Maximum Likelihood Updating rule. Our experiment allows for a better understanding of the overweighting of private information documented in previous studies.

Suggested Citation

  • Roberta De Filippis & Antonio Guarino & Philippe Jehiel & Toru Kitagawa, 2017. "Updating ambiguous beliefs in a social learning experiment," CeMMAP working papers CWP13/17, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  • Handle: RePEc:ifs:cemmap:13/17
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    References listed on IDEAS

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    Cited by:

    1. Alice Hsiaw & Ing-Haw Cheng, 2016. "Distrust in Experts and the Origins of Disagreement," Working Papers 110, Brandeis University, Department of Economics and International Businesss School.
    2. Marco Angrisani & Antonio Guarino & Philippe Jehiel & Toru Kitagawa, 2017. "Information redundancy neglect versus overconfidence: a social learning experiment," CeMMAP working papers CWP32/17, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.

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    Keywords

    Social learning experiment;

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