How Social Learning Overcomes Confirmation Bias

Aislinn Bohren and Daniel Hauser

No 21727, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We develop a flexible model of confirmation bias, in which individuals misinterpret signals as stronger evidence for the state favored by their prior than they actually are. The bias varies with the agent's current belief, nesting Rabin and Schrag (1999) as a special case. In an individual learning setting, incorrect learning arises with positive probability when the bias is severe, generalizing existing work. By contrast, in a social learning setting, correct learning obtains almost surely regardless of the severity of bias. Whereas social information typically introduces inefficiencies, here it mitigates them: social interaction overcomes bias that would otherwise generate incorrect learning.

JEL-codes: D83 (search for similar items in EconPapers)
Date: 2026-07
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