An Experiment On Social Mislearning

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 f...

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Bibliographic Details
Published inIDEAS Working Paper Series from RePEc
Main Authors Eyster, Erik, Rabin, Matthew, Weizsäcker, Georg
Format Paper
LanguageEnglish
Published St. Louis Federal Reserve Bank of St. Louis 01.01.2018
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Summary: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.