Coordination and social learning

Chong Huang ()
Additional contact information
Chong Huang: University of California, Irvine

Economic Theory, 2018, vol. 65, issue 1, No 7, 155-177

Abstract: Abstract This paper studies the interaction between coordination and social learning in a dynamic regime change game. Social learning provides public information, to which players overreact due to the coordination motive. Coordination affects the aggregation of private signals through players’ optimal choices. Such endogenous provision of public information results in informational cascades and thus inefficient herds, with positive probability, even if private signals have an unbounded likelihood ratio property. An extension shows that if players can individually learn, there exists an equilibrium in which inefficient herding disappears, and thus, coordination is almost surely successful.

Keywords: Coordination; Social learning; Inefficient herding; Dynamic global game; Common belief (search for similar items in EconPapers)
JEL-codes: C72 C73 D82 D83 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s00199-016-1014-z Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:joecth:v:65:y:2018:i:1:d:10.1007_s00199-016-1014-z

Ordering information: This journal article can be ordered from
http://www.springer. ... eory/journal/199/PS2

DOI: 10.1007/s00199-016-1014-z

Access Statistics for this article

Economic Theory is currently edited by Nichoals Yanneils

More articles in Economic Theory from Springer, Society for the Advancement of Economic Theory (SAET) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().