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Social learning with coarse inference

Jehiel, P.; Guarino, A.; (2009) Social learning with coarse inference. (ELSE Working Papers 337). ESRC Centre for Economic Learning and Social Evolution: London, UK. Green open access

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Abstract

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 understand their predecessors’ decisions in their finest details: they only understand the relation between the aggregate distribution of actions and the state of nature. We show that, in a continuous action space, compared to the rational case, agents put more weight on early signals. Despite this behavioral bias, beliefs converge to the truth. In a discrete action space, instead, convergence to the truth does not occur even if agents receive signals of unbounded precisions.

Type: Working / discussion paper
Title: Social learning with coarse inference
Open access status: An open access version is available from UCL Discovery
Publisher version: http://else.econ.ucl.ac.uk/newweb/papers.php#2009
Language: English
UCL classification: UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics
URI: https://discovery.ucl.ac.uk/id/eprint/18248
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