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Error Cascades in Observational Learning: An Experiment on the Chinos Game

  • Francesco Feri

    ()

  • Miguel A. Mel?ndez-Jim?nez

    ()

  • Giovanni Ponti

    ()

  • Fernando Vega Redondo

    ()

The paper reports an experimental study based on a variant of the popular Chinos game, which is used as a simple but paradigmatic instance of observational learning. There are three players, arranged in sequence, each of whom wins a fixed price if she manages to guess the total number of coins lying in everybody?s hands. Our evidence shows that, despite the remarkable frequency of equilibrium outcomes, deviations from optimal play are also significant. And when such deviations occur, we find that, for any given player position, the probability of a mistake is increasing in the probability of a mistake of her predecessors. This is what we call an error cascade, which we which we measure by way of two alternative models.

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File URL: http://eeecon.uibk.ac.at/wopec2/repec/inn/wpaper/2008-21.pdf
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Paper provided by Faculty of Economics and Statistics, University of Innsbruck in its series Working Papers with number 2008-21.

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Length: 43
Date of creation: Sep 2008
Date of revision:
Handle: RePEc:inn:wpaper:2008-21
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