Altruistic Observational Learning
89 Pages Posted: 8 Apr 2016
Date Written: March 3, 2016
Abstract
We report two information cascade game experiments that directly test the impact of altruism on observational learning. Participants interact in two parallel sequences, the observed and the unobserved sequence. Only the actions of the observed entail informational benefits to subsequent participants. We find that observed contradict their private information significantly less often than unobserved when the monetary incentives to herd are moderately weak. Long laboratory cascades accumulate substantial public information which increases the earnings of participants. In Experiment 2, participants have better opportunities to learn about the strategies played by observed which amplifies the impact of altruism on observational learning.
Keywords: social learning, informational herding, altruistic behavior
JEL Classification: D640, D820, D830
Suggested Citation: Suggested Citation