Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/320273 
Year of Publication: 
2024
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 19 [Issue:] 4 [Year:] 2024 [Pages:] 1505-1541
Publisher: 
The Econometric Society, New Haven, CT
Abstract: 
We build a model studying the effect of an economy's potential for social learning on the adoption of innovations of uncertain quality. Assuming consumers are forward-looking (i.e., recognize the value of waiting for information), we analyze how qualitative and quantitative features of the learning environment affect equilibrium adoption dynamics, welfare, and the speed of learning. Based on this, we show how differences in the learning environment translate into observable differences in adoption dynamics, suggesting a purely informational channel for two commonly documented adoption patterns: S-shaped and concave curves. We also identify environments that are subject to a saturation effect: Increased opportunities for social learning can slow down adoption and learning, and do not increase consumer welfare, possibly even being harmful.
Subjects: 
exponential bandits
informational free-riding
Innovation adoption
social learning
strategic experimentation
JEL: 
D80
D83
O33
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.