An Experimental Test of Advice and Social Learning

Management Science, Vol. 56, No. 10, pp. 1687-1701, 2010

Columbia Business School Research Paper No. 11-31

15 Pages Posted: 22 Oct 2011

See all articles by Shachar Kariv

Shachar Kariv

University of California, Berkeley - Department of Economics

Andrew Schotter

New York University (NYU) - Department of Economics

Bogaçhan Çelen

Columbia Business School - Finance and Economics

Date Written: October 1, 2010

Abstract

Social learning is the process of individuals learning by observing the actions of others. One odd aspect of the literature on social learning though is that, ironically, learning is not very social because in the real world, although people learn by observing the actions of others, they also learn from advice. This paper introduces the giving of advice into a standard social-learning problem. The experiment is designed so that both pieces of information - action and advice - are equally informative (in fact, identical) in equilibrium. In the laboratory, in contrast, subjects are more willing to follow the advice given to them by their predecessors than to copy their actions, and subjects' behavior is more consistent with the prediction of the theory. Consequently, advice is both more informative and welfare improving than action.

Suggested Citation

Kariv, Shachar and Schotter, Andrew and Çelen, Bogaçhan, An Experimental Test of Advice and Social Learning (October 1, 2010). Management Science, Vol. 56, No. 10, pp. 1687-1701, 2010, Columbia Business School Research Paper No. 11-31, Available at SSRN: https://ssrn.com/abstract=1946969

Shachar Kariv

University of California, Berkeley - Department of Economics ( email )

549 Evans Hall #3880
Berkeley, CA 94720-3880
United States

Andrew Schotter

New York University (NYU) - Department of Economics ( email )

269 Mercer Street, 7th Floor
New York, NY 10011
United States
212-998-8909 (Phone)
212-995-4186 (Fax)

Bogaçhan Çelen (Contact Author)

Columbia Business School - Finance and Economics ( email )

3022 Broadway
New York, NY 10027
United States

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