Pathological Outcomes of Observational Learning

Smith, Lones; Sørensen, Peter Birch

doi:10.1111/1468-0262.00113

Cited by 640 publications

(586 citation statements)

References 10 publications

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“…Allowing for heterogeneous preferences, and other idiosyncratic preferences that favor particular types of restaurants, can also change the results. These are the subjects of a set of papers such as Bikhchandani, Hirshleifer and Welch (1998), Smith and Sorensen (2000), Celen and Kariv (2004a,b), and Acemoglu et al (2008). For example, Acemoglu et al (2008) provide results on how social learning depends on how neighborhoods of which agents observe which other agents develop over time, and also on how accurate various agents' signals are.…”

Section: Learningmentioning

confidence: 99%

An Overview of Social Networks and Economic Applications

Jackson¹

2011

Handbook of Social Economics

214

147

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In this chapter I provide an overview of research on social networks and their role in shaping behavior and economic outcomes. I include discussion of empirical and theoretical analyses of the role of social networks in markets and exchange, learning and diffusion, and network games. I also include some background on social network characteristics and measurements, models of network formation, models for the statistical analysis of social networks, as well as community detection.

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Section: Learningmentioning

confidence: 99%

An Overview of Social Networks and Economic Applications

Jackson¹

2011

Handbook of Social Economics

214

147

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“…1 3 This postponement is akin to herding e¤ects studied, for instance, by Smith and Sorensen (2000), but unlike herding models, we consider two long-run and forward-looking players, who act at endogenous times. Unlike our model and herding models, Bulow and Klemperer (1994) derive similar frenzies and crashes also in private-values environments.…”

Section: Related Literaturementioning

confidence: 99%

Competitive experimentation with private information: The survivor's curse

Moscarini

Squintani

2010

Journal of Economic Theory

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“…Thus, her successor will be slightly in favor of joining the deviation. This is referred to by Smith and Sørensen (2000) as the overturning principal.…”

Section: Perfect Versus Imperfect Informationmentioning

confidence: 99%

Observational learning under imperfect information

Çelen

Kariv

2004

Games and Economic Behavior

126

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The analysis explores Bayes-rational sequential decision making in a game with pure information externalities, where each decision maker observes only her predecessor's binary action. Under perfect information the martingale property of the stochastic learning process is used to establish convergence of beliefs and actions. Under imperfect information, in contrast, beliefs and actions cycle forever. However, despite the instability, over time the private information is ignored and decision makers become increasingly likely to imitate their predecessors. Consequently, we observe longer and longer periods of uniform behavior, punctuated by increasingly rare switches. These results suggest that imperfect information premise provides a better theoretical description of fads and fashions. (JEL D82, D83). * We are grateful to Douglas Gale for his guidance, to an Associate Editor and an anonymous referee for their comments and to William J. Baumol who read carefully through the manuscript, and made invaluable suggestions on exposition. We also acknowledge helpful discussions of Jean

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Pathological Outcomes of Observational Learning

Abstract: This paper systematically analyzes and enriches the observational learning paradigm of Banerjee (1992) and Bikhchandani, Hirshleifer, and Welch (1992

Cited by 640 publications

References 10 publications

An Overview of Social Networks and Economic Applications

An Overview of Social Networks and Economic Applications

Competitive experimentation with private information: The survivor's curse

Observational learning under imperfect information

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