Using Response Times to Infer Others’ Beliefs: An Application to Information Cascades
68 Pages Posted: 2 Aug 2016 Last revised: 10 Jul 2019
Date Written: May 8, 2019
The standard assumption in social learning environments is that agents learn from others through choice outcomes. We argue that in many settings, agents can also infer information from others’ response times (RT), which can increase efficiency. To investigate this, we conduct a standard information cascade experiment and find that RTs do contain information that is not revealed by choice outcomes alone. When RTs are observable, subjects extract this private information and are more likely to break from incorrect cascades. Our results suggest that in environments where RTs are publicly available, the information structure may be richer than previously thought.
Keywords: information cascades, drift diffusion model, neuroeconomics, response times, sequential sampling model
JEL Classification: D87, D81, C92
Suggested Citation: Suggested Citation