Abstract

http://ssrn.com/abstract=1021994
 
 

References (30)



 
 

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Observational Learning: Evidence from a Randomized Natural Field Experiment


Hongbin Cai


Peking University - Guang Hua School of Management

Yuyu Chen


Peking University - Guang Hua School of Management

Hanming Fang


University of Pennsylvania - Department of Economics; National Bureau of Economic Research (NBER)

October 2007

NBER Working Paper No. w13516

Abstract:     
We present results about the effects of observing others' choices, called observational learning, on individuals' behavior and subjective well-being in the context of restaurant dining from a randomized natural field experiment. Our experimental design aims to distinguish observational learning effect from saliency effect (because observing others' choices also makes these choices more salient). We find that, depending on specifications, the demand for the top 5 dishes was increased by an average of about 13 to 18 percent when these popularity rankings were revealed to the customers; in contrast, being merely mentioned as some sample dishes did not significantly boost their demand. Moreover, we find that, consistent with theoretical predictions, some modest evidence that observational learning effect was stronger among infrequent customers. We also find that customers' subjective dining experiences were improved when presented with the information about the top choices by other consumers, but not when presented with the names of some sample dishes.

Number of Pages in PDF File: 31

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Date posted: October 16, 2007  

Suggested Citation

Cai, Hongbin and Chen, Yuyu and Fang, Hanming, Observational Learning: Evidence from a Randomized Natural Field Experiment (October 2007). NBER Working Paper No. w13516. Available at SSRN: http://ssrn.com/abstract=1021994

Contact Information

Hongbin Cai
Peking University - Guang Hua School of Management ( email )
Peking University
Beijing, Beijing 100871
China
Yuyu Chen
Peking University - Guang Hua School of Management ( email )
Peking University
Beijing, Beijing 100871
China
Hanming Fang (Contact Author)
University of Pennsylvania - Department of Economics ( email )
3718 Locust Walk
Philadelphia, PA 19104
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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