Social learning with private and common values
Thomas Palfrey and
No 1187, Working Papers from California Institute of Technology, Division of the Humanities and Social Sciences
We consider an environment where individuals sequentially choose among several actions. The payoff to an individual depends on her action choice, the state of the world, and an idiosyncratic, privately observed preference shock. Under weak conditions, as the number of individuals increases, the sequence of choices always reveals the state of the world. This contrasts with the familiar result for pure common-value environments where the state is 'never' learned, resulting in herds or informational cascades. The medium run dynamics to convergence can be very complex and non-monotone: posterior beliefs may be concentrated on a wrong state for a long time, shifting suddenly to the correct state.
Keywords: social learning; information cascades; herd behavior (search for similar items in EconPapers)
Pages: 29 pages
References: Add references at CitEc
Citations: Track citations by RSS feed
Published: Economic Theory, Vol. 28 (2006) p. 245-64.
Downloads: (external link)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.hss.caltech.edu/SSPapers/sswp1187c.pdf [301 Moved Permanently]--> https://www.hss.caltech.edu/SSPapers/sswp1187c.pdf)
Journal Article: Social learning with private and common values (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:clt:sswopa:1187
Ordering information: This working paper can be ordered from
Working Paper Assistant, Division of the Humanities and Social Sciences, 228-77, Caltech, Pasadena CA 91125
Access Statistics for this paper
More papers in Working Papers from California Institute of Technology, Division of the Humanities and Social Sciences Working Paper Assistant, Division of the Humanities and Social Sciences, 228-77, Caltech, Pasadena CA 91125.
Bibliographic data for series maintained by Victoria Mason ().