Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86446
Authors: 
Kocher, Martin G.
Sutter, Matthias
Wakolbinger, Florian
Year of Publication: 
2007
Series/Report no.: 
Tinbergen Institute Discussion Paper 07-015/1
Abstract: 
We study the impact of advice or observation on the depth of reasoning in an experimental beauty-contest game. Both sources of information trigger faster convergence to the equilibrium. Yet, we find that subjects who receive naïve advice outperform uninformed subjects permanently, whereas subjects who observe others’ past behavior before making their decision do only have a temporary advantage over uninformed subjects. We show in a simulation that the latter result is due to subjects failing to make the most out of observing others.
Subjects: 
social learning
advice
observational learning
beauty-contest game
JEL: 
C70
C72
C91
Document Type: 
Working Paper

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