Social Learning with Costly Search

Manuel Mueller-Frank and Mallesh M. Pai

American Economic Journal: Microeconomics, 2016, vol. 8, issue 1, 83-109

Abstract: We study a sequential social learning model where agents privately acquire information by costly search. Search costs of agents are private, and are independently and identically distributed. We show that asymptotic learning occurs if and only if search costs are not bounded away from zero. We explicitly characterize equilibria for the case of two actions, and show that the probability of late moving agents taking the suboptimal action vanishes at a linear rate. Social welfare converges to the social optimum as the discount rate converges to one if and only if search costs are not bounded away from zero. (JEL D81, D83)

JEL-codes: D81 D83 (search for similar items in EconPapers)
Date: 2016
Note: DOI: 10.1257/mic.20130253
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/mic.20130253 (application/pdf)
http://www.aeaweb.org/aej/mic/ds/0801/2013-0253_ds.zip (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

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:aea:aejmic:v:8:y:2016:i:1:p:83-109

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Journal: Microeconomics is currently edited by Johannes Hörner

More articles in American Economic Journal: Microeconomics from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().