Social Learning with Coarse Inference

Starts: Wednesday 7 March 2012 1:00 pm
Ends: Wednesday 7 March 2012 2:00 pm
Event type Seminar
Location MJ118
Presented by: Antonio Guarino (UCL)

We study social learning by boundedly rational agents. Agents take a decision in sequence, after observing their predecessors and a private signal. They are unable to make perfect inferences from their predecessors' decisions: they only understand the relation between the aggregate distribution of actions and the state of nature and make their inferences accordingly.

We show that, in a discrete action space, even if agents receive signals of unbounded precision, convergence to the truth does not occur. In a continuous action space, compared to the rational case, agents overweight early signals. Despite this behavioural bias, convergence to the truth eventually obtains.

E&F research seminar convener: Russ Moro (Russ.Moro@brunel.ac.uk)

Page last updated: Wednesday 21 March 2012