Boundedly Rational Opinion Dynamics in Directed Social Networks: Theory and Experimental Evidence
This paper investigates opinion dynamics and social influence in directed communication networks. We study the properties of a generalized boundedly rational model of opinion formation in which individuals aggregate the information they receive by using weights that are a function of their neighbors' indegree. We then present an experiment designed to test the predictions of the model. We find that both Bayesian updating and boundedly rational updating à la DeMarzo et al. (2003) are rejected by the data. Consistent with our theoretical predictions, the social influence of an agent is positively and significantly affected by the number of individuals she listens to. When forming their opinions, agents do take into account the structure of the communication network, although in a sub-optimal way.
|Date of creation:||Jan 2014|
|Date of revision:||Jan 2014|
|Contact details of provider:|| Postal: Piazza Ateneo Nuovo, 1 Milano 20126|
Phone: +39 02 6448 3089
Fax: +39 02 6448 3085
Web page: http://dems.unimib.it
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- Sushil Bikhchandani & David Hirshleifer & Ivo Welch, 2010. "A theory of Fads, Fashion, Custom and cultural change as informational Cascades," Levine's Working Paper Archive 1193, David K. Levine.
- Jadbabaie, Ali & Molavi, Pooya & Sandroni, Alvaro & Tahbaz-Salehi, Alireza, 2012. "Non-Bayesian social learning," Games and Economic Behavior, Elsevier, vol. 76(1), pages 210-225.
- Bimpikis, Kostas & Ozdaglar, Asuman & Acemoglu, Daron, 2014.
"Dynamics of information exchange in endogenous social networks,"
Econometric Society, vol. 9(1), January.
- Daron Acemoglu & Kostas Bimpikis & Asuman E, Ozdaglar, 2010. "Dynamics of Information Exchange in Endogenous Social Networks," Levine's Working Paper Archive 661465000000000216, David K. Levine.
- Daron Acemoglu & Kostas Bimpikis & Asuman Ozdaglar, 2010. "Dynamics of Information Exchange in Endogenous Social Networks," NBER Working Papers 16410, National Bureau of Economic Research, Inc.
- Smith, L. & Sorensen, P., 1996.
"Pathological Outcomes of Observational Learning,"
115, Economics Group, Nuffield College, University of Oxford.
- Daron Acemoglu & Munther A. Dahleh & Ilan Lobel & Asuman Ozdaglar, 2011.
"Bayesian Learning in Social Networks,"
Review of Economic Studies,
Oxford University Press, vol. 78(4), pages 1201-1236.
- G. Ellison & D. Fudenberg, 2010.
"Rules of Thumb for Social Learning,"
Levine's Working Paper Archive
435, David K. Levine.
- Allison, G. & Fudenberg, D., 1992. "Rules of Thumb for Social Learning," Working papers 92-12, Massachusetts Institute of Technology (MIT), Department of Economics.
- Ellison, Glenn & Fudenberg, Drew, 1992. "Rules of Thumb for Social Learning," IDEI Working Papers 17, Institut d'Économie Industrielle (IDEI), Toulouse.
- Ellison, Glenn & Fudenberg, Drew, 1993. "Rules of Thumb for Social Learning," Scholarly Articles 3196332, Harvard University Department of Economics.
- Abhijit Banerjee & Arun G. Chandrasekhar & Esther Duflo & Matthew O. Jackson, 2012.
"The Diffusion of Microfinance,"
NBER Working Papers
17743, National Bureau of Economic Research, Inc.
- Peter M. DeMarzo & Dimitri Vayanos & Jeffrey Zwiebel, 2003.
"Persuasion Bias, Social Influence, and Unidimensional Opinions,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 118(3), pages 909-968.
- Peter M. DeMarzo & Dimitri Vayanos & Jeffrey Zwiebel, 2003. "Persuasion bias, social influence, and uni-dimensional opinions," LSE Research Online Documents on Economics 454, London School of Economics and Political Science, LSE Library.
- Zwiebel, Jeffrey H. & Vayanos, Dimitri & DeMarzo, Peter M., 2001. "Persuasion Bias, Social Influence, and Uni-Dimensional Opinions," Research Papers 1719, Stanford University, Graduate School of Business.
- Buechel, Berno & Hellmann, Tim & Klößner, Stefan, 2015.
"Opinion dynamics and wisdom under conformity,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 52(C), pages 240-257.
- Büchel, Berno & Hellmann, Tim & Klößner, Stefan, 2013. "Opinion Dynamics and Wisdom under Conformity," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79770, Verein für Socialpolitik / German Economic Association.
- Berno Buechel & Tim Hellmann & Stefan Kölßner, 2014. "Opinion Dynamics and Wisdom under Conformity," Working Papers 2014.51, Fondazione Eni Enrico Mattei.
- Buechel, Berno & Hellmann, Tim & KlÃ¶ÃŸner, Stefan, 2014. "Opinion dynamics and wisdom under conformity," Center for Mathematical Economics Working Papers 469, Center for Mathematical Economics, Bielefeld University.
- Leo Katz, 1953. "A new status index derived from sociometric analysis," Psychometrika, Springer;The Psychometric Society, vol. 18(1), pages 39-43, March.
- Venkatesh Bala & Sanjeev Goyal, 1998. "Learning from Neighbours," Review of Economic Studies, Oxford University Press, vol. 65(3), pages 595-621.
- Daron Acemoglu & Asuman E. Ozdaglar, 2010.
"Opinion Dynamics and Learning in Social Networks,"
Levine's Working Paper Archive
661465000000000222, David K. Levine.
- Rainer Hegselmann & Ulrich Krause, 2002. "Opinion Dynamics and Bounded Confidence Models, Analysis and Simulation," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 5(3), pages 2.
- Corazzini, Luca & Pavesi, Filippo & Petrovich, Beatrice & Stanca, Luca, 2012.
"Influential listeners: An experiment on persuasion bias in social networks,"
European Economic Review,
Elsevier, vol. 56(6), pages 1276-1288.
- Luca Corazzini & Filippo Pavesi & Beatrice Petrovich & Luca Stanca, 2010. "Influential Listeners: An Experiment on Persuasion Bias in Social Networks," Working Papers 196, University of Milano-Bicocca, Department of Economics, revised Aug 2010.
- Gale, Douglas & Kariv, Shachar, 2003. "Bayesian learning in social networks," Games and Economic Behavior, Elsevier, vol. 45(2), pages 329-346, November.
- Stefano DellaVigna & Matthew Gentzkow, 2009.
"Persuasion: Empirical Evidence,"
NBER Working Papers
15298, National Bureau of Economic Research, Inc.
- Rainer Hegselmann & Ulrich Krause, 2005. "Opinion Dynamics Driven by Various Ways of Averaging," Computational Economics, Society for Computational Economics, vol. 25(4), pages 381-405, June.
- Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 797-817.
- Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
When requesting a correction, please mention this item's handle: RePEc:mib:wpaper:267. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Matteo Pelagatti)
If references are entirely missing, you can add them using this form.