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Naive learning in social networks: Imitating the most successful neighbor

Listed author(s):
  • Tsakas, Nikolas

This paper considers a model of observational learning in social networks. Every period, the agents observe the actions of their neighbors and their realized outcomes, and they imitate the most successful. First, we study the case where the network has finite population and we show that, regardless of the structure, the population converges to a monomorphic steady state, i.e. where every agent chooses the same action. Subsequently, we extend our analysis to infinitely large networks and we differentiate the cases where agents have bounded neighborhoods, with those where they do not. Under bounded neighborhoods, an action is diffused to the whole population if it is the only one initially chosen by infinitely many agents. If there exist more than one such actions, we provide an additional sufficient condition in the payoff structure, which ensures convergence for any network. Without the assumption of bounded neighborhoods, we show that an action can survive even if it is initially chosen by a single agent and also that a network can be in steady state without this being monomorphic.

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File URL: https://mpra.ub.uni-muenchen.de/37796/1/MPRA_paper_37796.pdf
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File URL: https://mpra.ub.uni-muenchen.de/45210/8/MPRA_paper_45210.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 37796.

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Date of creation: 23 Mar 2012
Handle: RePEc:pra:mprapa:37796
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  1. Apesteguia, Jose & Huck, Steffen & Oechssler, Jorg, 2007. "Imitation--theory and experimental evidence," Journal of Economic Theory, Elsevier, vol. 136(1), pages 217-235, September.
  2. Schlag, Karl H., 1999. "Which one should I imitate?," Journal of Mathematical Economics, Elsevier, vol. 31(4), pages 493-522, May.
  3. Gale, Douglas & Kariv, Shachar, 2003. "Bayesian learning in social networks," Games and Economic Behavior, Elsevier, vol. 45(2), pages 329-346, November.
  4. Glenn Ellison & Drew Fudenberg, 1995. "Word-of-Mouth Communication and Social Learning," The Quarterly Journal of Economics, Oxford University Press, vol. 110(1), pages 93-125.
  5. Timothy G. Conley & Christopher R. Udry, 2010. "Learning about a New Technology: Pineapple in Ghana," American Economic Review, American Economic Association, vol. 100(1), pages 35-69, March.
  6. Fosco, Constanza & Mengel, Friederike, 2011. "Cooperation through imitation and exclusion in networks," Journal of Economic Dynamics and Control, Elsevier, vol. 35(5), pages 641-658, May.
  7. Dekel, Eddie & Fudenberg, Drew & Levine, David K., 2004. "Learning to play Bayesian games," Games and Economic Behavior, Elsevier, vol. 46(2), pages 282-303, February.
  8. Ellison, Glenn & Fudenberg, Drew, 1993. "Rules of Thumb for Social Learning," Journal of Political Economy, University of Chicago Press, vol. 101(4), pages 612-643, August.
  9. Banerjee, Abhijit & Fudenberg, Drew, 2004. "Word-of-mouth learning," Games and Economic Behavior, Elsevier, vol. 46(1), pages 1-22, January.
  10. Schlag, Karl H., 1998. "Why Imitate, and If So, How?, : A Boundedly Rational Approach to Multi-armed Bandits," Journal of Economic Theory, Elsevier, vol. 78(1), pages 130-156, January.
  11. Drew Fudenberg & David K. Levine, 1998. "The Theory of Learning in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061945.
  12. Fernando Vega-Redondo, 1997. "The Evolution of Walrasian Behavior," Econometrica, Econometric Society, vol. 65(2), pages 375-384, March.
  13. Eshel, Ilan & Samuelson, Larry & Shaked, Avner, 1998. "Altruists, Egoists, and Hooligans in a Local Interaction Model," American Economic Review, American Economic Association, vol. 88(1), pages 157-179, March.
  14. Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 797-817.
  15. Venkatesh Bala & Sanjeev Goyal, 1998. "Learning from Neighbours," Review of Economic Studies, Oxford University Press, vol. 65(3), pages 595-621.
  16. Schlag, Karl H., 1998. "Why Imitate, and If So, How?, : A Boundedly Rational Approach to Multi-armed Bandits," Journal of Economic Theory, Elsevier, vol. 78(1), pages 130-156, January.
  17. Josephson, Jens & Matros, Alexander, 2004. "Stochastic imitation in finite games," Games and Economic Behavior, Elsevier, vol. 49(2), pages 244-259, November.
  18. Alós-Ferrer, Carlos & Weidenholzer, Simon, 2008. "Contagion and efficiency," Journal of Economic Theory, Elsevier, vol. 143(1), pages 251-274, November.
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