De Filippis, R;
Guarino, A;
Jehiel, P;
Kitagawa, T;
(2017)
Updating ambiguous beliefs in a social learning experiment.
(cemmap working paper
13/17).
Institute for Fiscal Studies: London, UK.
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Abstract
We present a social learning experiment in which subjects predict the value of a good in sequence. We elicit each subject’s belief twice: first (“first belief”), after he observes his predecessors’ prediction; second, after he also observes a private signal. Our main result is that subjects update on their signal asymmetrically. They weigh the private signal as a Bayesian agent when it confirms their first belief and overweight it when it contradicts their first belief. This way of updating, incompatible with Bayesianism, can be explained by ambiguous beliefs (multiple priors on the predecessor’s rationality) and a generalization of the Maximum Likelihood Updating rule. Our experiment allows for a better understanding of the overweighting of private information documented in previous studies.
| Type: | Working / discussion paper |
|---|---|
| Title: | Updating ambiguous beliefs in a social learning experiment |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1920/wp.cem.2017.1317 |
| Publisher version: | http://dx.medra.org/10.1920/wp.cem.2017.1317 |
| Language: | English |
| Additional information: | This version is the version of record. For information on re-use, please refer to the publisher’s terms and conditions. |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL SLASH UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10038917 |
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