Social learning with partial and aggregate information: Experimental evidence

Elisa Cavatorta; Antonio Guarino; Steffen Huck

doi:10.1016/j.geb.2024.05.005

Social learning with partial and aggregate information: Experimental evidence

Elisa Cavatorta^*
, Antonio Guarino^*
, Steffen Huck^*

^*Corresponding author for this work

UCL University College London
CEPR
Wissenschaftszentrum Berlin für Sozialforschung (WZB)

Research output: Contribution to journal › Article › peer-review

1 Citation (Scopus)

208 Downloads (Pure)

Abstract

In our information cascade experiments, we study social learning in decision-making situations in which decisions “not to do” are unobservable. Subjects, in sequence, choose whether to invest or not, without knowing their position. They observe a private signal and the number of investments made by their predecessors, but not how many predecessors have chosen not to invest. We find that down cascades, in which agents neglect the signal and do not invest, occur, in contrast with the equilibrium predictions. Up cascades, in which agents invest independently of the signal, occur, but less than in equilibrium.

Original language	English
Pages (from-to)	292-307
Number of pages	16
Journal	GAMES AND ECONOMIC BEHAVIOR
Volume	146
Early online date	28 Jun 2024
DOIs	https://doi.org/10.1016/j.geb.2024.05.005
Publication status	Published - Jul 2024

Keywords

Experiment
Information aggregation
Informational cascades
Partial observability
Social learning

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10.1016/j.geb.2024.05.005

Cavatorta_etal2024_Social_Learning_with_aggregate_information_experimental_evidenceAccepted author manuscript, 1.28 MBLicence: CC BY

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keywords = "Experiment, Information aggregation, Informational cascades, Partial observability, Social learning",

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AU - Cavatorta, Elisa

AU - Guarino, Antonio

AU - Huck, Steffen

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AB - In our information cascade experiments, we study social learning in decision-making situations in which decisions “not to do” are unobservable. Subjects, in sequence, choose whether to invest or not, without knowing their position. They observe a private signal and the number of investments made by their predecessors, but not how many predecessors have chosen not to invest. We find that down cascades, in which agents neglect the signal and do not invest, occur, in contrast with the equilibrium predictions. Up cascades, in which agents invest independently of the signal, occur, but less than in equilibrium.

KW - Experiment

KW - Information aggregation

KW - Informational cascades

KW - Partial observability

KW - Social learning

UR - https://www.scopus.com/pages/publications/85196967045

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JO - GAMES AND ECONOMIC BEHAVIOR

JF - GAMES AND ECONOMIC BEHAVIOR

ER -

Social learning with partial and aggregate information: Experimental evidence

Abstract

Keywords

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