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Crowd Learning without Herding : A Mechanism Design Approach

Author

Listed:
  • Glazer, Jacob

    (Department of Economics, University of Warwick and Faculty of Management Tel Aviv University)

  • Kremer, Ilan

    (Department of Economics, University of Warwick and Faculty of Management and Economics Department, The Hebrew University of Jerusalem)

  • Perry, Motty

    (Department of Economics, University of Warwick)

Abstract

Crowdfunding, Internet websites, and health care are only a few examples of markets in which agents make decisions not only on the basis of their own investigations and knowledge, but also on the basis of information from a "central planner" about other agents’ actions. While such reciprocal learning can be welfare-improving, it may reduce agents’ incentives to conduct their own investigations, and may lead to harmful cascades. We study the planner’s optimal policy regarding when to provide information and how much information to provide. We show that the optimum policy involves a delicate balance of hiding and revealing information.

Suggested Citation

  • Glazer, Jacob & Kremer, Ilan & Perry, Motty, 2015. "Crowd Learning without Herding : A Mechanism Design Approach," The Warwick Economics Research Paper Series (TWERPS) 1095, University of Warwick, Department of Economics.
  • Handle: RePEc:wrk:warwec:1095
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    References listed on IDEAS

    as
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    Keywords

    Informationio Cascades ; Mechanism Design;

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