An Experiment On Social Mislearning

Erik Eyster, Matthew Rabin and Georg Weizsäcker
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Erik Eyster: London School of Economics and Political Science
Matthew Rabin: Harvard University

No 73, Rationality and Competition Discussion Paper Series from CRC TRR 190 Rationality and Competition

Abstract: We investigate experimentally whether social learners appreciate the redundancy of information conveyed by their observed predecessors\' actions. Each participant observes a private signal and enters an estimate of the sum of all earlier-moving participants\' signals plus her own. In a first treatment, participants move single-file and observe all predecessors\' entries; Bayesian Nash Equilibrium (BNE) predicts that each participant simply add her signal to her immediate predecessor\'s entry. Although 75% of participants do so, redundancy neglect by the other 25% generates excess imitation and mild inefficiencies. In a second treatment, participants move four per period; BNE predicts that most players anti-imitate some observed entries. Such anti-imitation occurs in 35% of the most transparent cases, and 16% overall. The remaining redundancy neglect creates dramatic excess imitation and inefficiencies: late-period entries are far too extreme, and on average participants would earn substantially more by ignoring their predecessors altogether.

Keywords: social learning; redundancy neglect; experiments; higher-order beliefs (search for similar items in EconPapers)
JEL-codes: B49 (search for similar items in EconPapers)
Date: 2018-02-21
New Economics Papers: this item is included in nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Working Paper: An Experiment on Social Mislearning (2015)
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