Stationary social learning in a changing environment

Raphaël Levy, Marcin Pęski and Nicolas Vieille
Additional contact information
Marcin Pęski: University of Toronto - Department of Economics
Nicolas Vieille: HEC Paris

No 1433, HEC Research Papers Series from HEC Paris

Abstract: We consider social learning in a changing world. With changing states, societies can remain responsive only if agents regularly act upon fresh information, which drastically limits the value of observational learning. When the state is close to persistent, a consensus whereby most agents choose the same action typically emerges. However, the consensus action is not perfectly correlated with the state, because societies exhibit inertia following state changes. Phases of inertia may be longer when signals are more precise, even if agents draw large samples of past actions, as actions then become too correlated within samples, thereby reducing informativeness and welfare.

Keywords: observational learning; herding (search for similar items in EconPapers)
JEL-codes: D83 (search for similar items in EconPapers)
Pages: 70 pages
Date: 2022-01-19
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3999770 Full text (text/html)

Related works:
Journal Article: Stationary Social Learning in a Changing Environment (2024)
Working Paper: Stationary social learning in a changing environment (2022)
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:ebg:heccah:1433

DOI: 10.2139/ssrn.3999770

Access Statistics for this paper

More papers in HEC Research Papers Series from HEC Paris HEC Paris, 78351 Jouy-en-Josas cedex, France. Contact information at EDIRC.
Bibliographic data for series maintained by Antoine Haldemann (haldemann@hec.fr).