An Experiment on Social Mislearning

46 Pages Posted: 18 Dec 2015 Last revised: 30 Dec 2015

See all articles by Erik Eyster

Erik Eyster

London School of Economics & Political Science (LSE) - Department of Economics

Matthew Rabin

Harvard University - Department of Economics

Georg Weizsacker

Humboldt University Berlin; DIW Berlin

Date Written: December 18, 2015

Abstract

We investigate experimentally whether social learners appreciate the redundancy of information conveyed by the behavior of those they observe. Each experimental participant observes a private signal and enters an estimate of the sum of all earlier-moving participants’ signals plus her own. In a first treatment, participants move single-file and observe all predecessors’ entries; Bayesian Nash Equilibrium (BNE) predicts that each participant simply add her signal to her immediate predecessor’s entry. Although 75% of participants do so, a tendency towards redundancy neglect by the other 25% generates excess imitation and mild inefficiencies overall. In a second treatment, participants move four at a time; BNE predicts that most players anti-imitate some observed entries. Such anti-imitation occurs 35% of the time when most transparent, and 16% overall. The remaining redundancy neglect creates dramatic excess imitation and inefficiencies overall: late-period entries are far too extreme, and on average participants would earn substantially more by ignoring their predecessors altogether.

Keywords: social learning, experiments, redundancy neglect, beliefs

JEL Classification: B49

Suggested Citation

Eyster, Erik and Rabin, Matthew and Weizsacker, Georg, An Experiment on Social Mislearning (December 18, 2015). Available at SSRN: https://ssrn.com/abstract=2704746 or http://dx.doi.org/10.2139/ssrn.2704746

Erik Eyster

London School of Economics & Political Science (LSE) - Department of Economics ( email )

Houghton Street
London WC2A 2AE
United Kingdom

Matthew Rabin

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States

Georg Weizsacker (Contact Author)

Humboldt University Berlin ( email )

Spandauer Str. 1
Berlin, D-10099
Germany

DIW Berlin

Mohrenstr. 58
Berlin
Germany

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