Learning in a Correlated World

Arjada Bardhi and Steven Callander

No 21351, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We survey a growing literature on correlated learning — how information from one choice changes beliefs about others when outcomes are correlated. The core modeling innovation is to represent the unknown mapping from choices to outcomes as the realized path of a stochastic process, most commonly the Brownian motion. We show how the framework has been applied to four canonical economic problems in which correlated learning is key but understudied: (i) search and experimentation, (ii) communication, (iii) innovation and market competition, and (iv) attribute problems. We review emerging empirical and experimental evidence on correlated learning and outline new theoretical and methodological directions.

Keywords: Brownian; motion (search for similar items in EconPapers)
Date: 2026-04
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