Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/185743 
Year of Publication: 
2018
Series/Report no.: 
Discussion Paper No. 73
Publisher: 
Ludwig-Maximilians-Universität München und Humboldt-Universität zu Berlin, Collaborative Research Center Transregio 190 - Rationality and Competition, München und Berlin
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.
Subjects: 
social learning
redundancy neglect
experiments
higher-order beliefs
JEL: 
B49
Document Type: 
Working Paper

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