Social Learning with Partial and Aggregate Information: Experimental Evidence

Elisa Cavatorta, Antonio Guarino and Steffen Huck

No 18461, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: In our information cascade experiments, we study social learning in decision- making situations in which decisions “not to do†are unobservable. Subjects, in sequence, choose whether to invest or not, without knowing their position. They observe a private signal and the number of investments made by their predecessors, but not how many predecessors have chosen not to invest. We find that down cas- cades, in which agents neglect the signal and do not invest, occur, in contrast with the equilibrium predictions. Up cascades, in which agents invest independently of the signal, occur, but less than in equilibrium.

Keywords: Social learning; Informational cascades; Asymmetric information; Laboratory experiments (search for similar items in EconPapers)
JEL-codes: C92 D82 (search for similar items in EconPapers)
Date: 2023-09
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Journal Article: Social learning with partial and aggregate information: Experimental evidence (2024)
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