Learning from the Experiments of Others Simultaneous Search, Coordination in R&D and Diffusion Processes: Laboratory Evidence

Niels D. Grosse () and Oliver Kirchkamp
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Niels D. Grosse: DFG Research Training Group "The Economics of Innovative Change", Friedrich-Schiller-University, Jena

No 2009-065, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: In this paper we are studying a multiple player two-armed bandit model with two risky arms in discrete time. Players have to find the superior arm and can learn from others' history of choices and successes. In equilibrium, there is no con?ict between individual and social rationality. If agents depart from perfect rationality and use count heuristics, they can benefit from coordination (or centralization) of search activities. We test the conjecture that agents gain from coordination with a between-subject design in two treatments. In the experiments we find no gains from coordination. Instead, we find less severe deviations from the equilibrium strategy in the non-coordinated treatment.

Keywords: two-armed bandit; parallel search; coordination; experiment (search for similar items in EconPapers)
JEL-codes: C91 D83 O33 (search for similar items in EconPapers)
Date: 2009-08-06
New Economics Papers: this item is included in nep-exp and nep-ino
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Persistent link: https://EconPapers.repec.org/RePEc:jrp:jrpwrp:2009-065

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