Choice under social influence: effects of learning behaviors on the collective dynamics

Viktoriya Semeshenko (), Mirta B. Gordon (), Jean-Pierre Nadal () and Denis Phan ()
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Viktoriya Semeshenko: Departamento de Economía [Buenos Aires] - Facultad de Ciencias Económicas [Buenos Aires] - UBA - Universidad de Buenos Aires [Buenos Aires], TIMC-IMAG - Techniques de l'Ingénierie Médicale et de la Complexité - Informatique, Mathématiques et Applications, Grenoble - UMR 5525 - UJF - Université Joseph Fourier - Grenoble 1 - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - VAS - VetAgro Sup - Institut national d'enseignement supérieur et de recherche en alimentation, santé animale, sciences agronomiques et de l'environnement - CNRS - Centre National de la Recherche Scientifique
Mirta B. Gordon: AMA - Analyse de données, Modélisation et Apprentissage automatique [Grenoble] - LIG - Laboratoire d'Informatique de Grenoble - UPMF - Université Pierre Mendès France - Grenoble 2 - UJF - Université Joseph Fourier - Grenoble 1 - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - INPG - Institut National Polytechnique de Grenoble - CNRS - Centre National de la Recherche Scientifique
Jean-Pierre Nadal: CAMS - Centre d'Analyse et de Mathématique sociales - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique, LPS - Laboratoire de Physique Statistique de l'ENS - FRDPENS - Fédération de recherche du Département de physique de l'Ecole Normale Supérieure - ENS Paris - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique - UPMC - Université Pierre et Marie Curie - Paris 6 - UPD7 - Université Paris Diderot - Paris 7 - CNRS - Centre National de la Recherche Scientifique

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Abstract: We consider a simple model in which a population of individuals with idiosyncratic willingnessesto pay must choose repeatedly either to buy or not a unit of a single homogeneous good at a givenprice. Utilities of buyers have positive externalities due to social interactions among customers.If the latter are strong enough, the system has multiple Nash equilibria, revealing coordinationproblems. We assume that individuals learn to make their decisions repeatedly. We study theperformances along the learning path as well as at the customers' reached equilibria, for differentlearning schemes based on past earned and/or forgone payoffs. Results are presented as a functionof the price, for weak and strong social interactions. Pure reinforcement learning is shown tohinder convergence to the Nash equilibrium, even when it is unique. For strong social interactions,coordination on the optimal equilibrium through learning is reached only with some of the learningschemes, under restrictive conditions. The issues of the learning rules are shown to depend cruciallyon the values of their parameters, and are sensitive to the agents' initial beliefs.

Date: 2007
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Published in Richard Topol; Bernard Walliser. Cognitive Economics: New Trends, 280, Elsevier, pp.178-203, 2007, Contributions to Economic Analysis, ‎ 978-0444522429

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Chapter: Choice under Social Influence: Effects of Learning Behaviours on the Collective Dynamics (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-04005045

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