Informational Herding and Optimal Experientation

Lones Smith and Peter Sørensen

Working papers from Massachusetts Institute of Technology (MIT), Department of Economics

Abstract: We explore the constrainned efficient observational learning model - as when individuals care about successors, or are so induced by an informationally- constrained social planner. We find that when the herding externality is correctly internali zed in this fashion, incorrect herds still obtain.

Keywords: DECISION MAKING; ECONOMIC MODELS (search for similar items in EconPapers)
JEL-codes: D80 D81 (search for similar items in EconPapers)
Pages: 22 pages
Date: 1997
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Related works:
Working Paper: Informational Herding and Optimal Experimentation (2006)
Working Paper: Informational Herding and Optimal Experimentation (2005)
Working Paper: Informational Herding and Optimal Experimentation (1997)
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