"Do We Follow Others when We Should? A Simple Test of Rational Expectations": Comment

Anthony Ziegelmeyer, Christoph March and Sebastian Krügel (kruegel@econ.mpg.de)
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Sebastian Krügel: Max Planck Institute of Economics, Jena, IMPRS "Uncertainty"

No 2012-006, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: Weizsäcker (2010) estimates the payoff of actions to test rational expectations and to measure the success of social learning in information cascade experiments. He concludes that participants perform poorly when learning from others and that rational expectations are violated. We show that his estimated payoffs rely on estimates of the publicly known prior and signal qualities which may lead the formulated test of rational expectations to generate false positives. We rely on the true values of the prior and signal qualities to estimate the payoff of actions. We confirm that the rational expectations hypothesis is rejected, but we measure a much larger success of social learning.

Keywords: Information Cascades; Laboratory Experiments; Quantal Response Equilibrium (search for similar items in EconPapers)
JEL-codes: C92 D82 (search for similar items in EconPapers)
Date: 2012-02-20
New Economics Papers: this item is included in nep-cbe, nep-cta, nep-evo, nep-exp, nep-gth and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Journal Article: Do We Follow Others When We Should? A Simple Test of Rational Expectations: Comment (2013)
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