Information aggregation with costly information and random ordering: experimental evidence

Carlo Kraemer, Markus Nöth and Martin Weber

No 00-35, Papers from Sonderforschungsbreich 504

Abstract: The cost of information is an often ignored factor in economic situations although the information acquisition behavior of the decision makers has a crucial influence on the outcome. In this experiment, we study an information aggregation process in which participants decide in a random sequence. Participants observe predecessors decisions and can acquire additional private information at a fixed price. We analyze participants information acquisition behavior and updating procedures. About one half of the individuals act rationally, whereas the other participants systematically overestimate the private signal value. This leads to excessive signal acquisitions and reduced conformity.

Keywords: information aggregation; information acquisition; Bayes’ rule; heuristics (search for similar items in EconPapers)
JEL-codes: C92 D8 (search for similar items in EconPapers)
Date: 2000
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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https://madoc.bib.uni-mannheim.de/2824/1/dp00_35.pdf

Related works:
Journal Article: Information aggregation with costly information and random ordering: Experimental evidence (2006)
Working Paper: Information Aggregation with Costly Information and Random Ordering: Experimental Evidence (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:mnh:spaper:2824

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