Learning and Information Aggregation in an Exit Game

Pauli Murto and Juuso Välimäki

The Review of Economic Studies, 2011, vol. 78, issue 4, 1426-1461

Abstract: We analyse information aggregation in a stopping game with uncertain pay-offs that are correlated across players. Players learn from their own private experiences as well as by observing the actions of other players. We give a full characterization of the symmetric mixed strategy equilibrium, and show that information aggregates in randomly occurring exit waves. Observational learning induces the players to stay in the game longer. The equilibria display aggregate randomness even for large numbers of players. Copyright 2011, Oxford University Press.

Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:oup:restud:v:78:y:2011:i:4:p:1426-1461

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