The Speed of Social Learning

44 Pages Posted: 24 Dec 2014 Last revised: 11 Feb 2017

Matan Harel

University of Geneva

Elchanan Mossel

University of Pennsylvania - Statistics Department

Philipp Strack

University of California, Berkeley - Department of Economics

Omer Tamuz

California Institute of Technology - Division of the Humanities and Social Sciences

Date Written: December 22, 2014

Abstract

Abstract. We study how effectively a group of rational agents learns from repeatedly observing each others' actions. We find that, in the long-run, observing discrete actions of others is significantly less informative than observing their private information: only a fraction of the private information is transmitted. We study how this fraction depends on the distribution of private signals.

Abstract. In a large society, where everyone's actions are public, this fraction tends to zero, i.e., only a vanishingly small share of the information is aggregated. We identify groupthink as the cause of this failure of information aggregation: As the number of agents grows, the actions of each individual depend more and more on the past actions of others, thus revealing less private information.

Keywords: Bayesian learning

JEL Classification: C73, D82, D83

Suggested Citation

Harel, Matan and Mossel, Elchanan and Strack, Philipp and Tamuz, Omer, The Speed of Social Learning (December 22, 2014). Available at SSRN: https://ssrn.com/abstract=2541707 or http://dx.doi.org/10.2139/ssrn.2541707

Matan Harel

University of Geneva ( email )

102 Bd Carl-Vogt
Genève, CH - 1205
Switzerland

Elchanan Mossel

University of Pennsylvania - Statistics Department ( email )

Wharton School
Philadelphia, PA 19104
United States

Philipp Strack (Contact Author)

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

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

HOME PAGE: http://philippstrack.com

Omer Tamuz

California Institute of Technology - Division of the Humanities and Social Sciences ( email )

1200 East California Blvd.
Pasadena, CA 91125
United States

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