Using Response Times to Infer Others’ Beliefs: An Application to Information Cascades

68 Pages Posted: 2 Aug 2016 Last revised: 10 Jul 2019

See all articles by Cary Frydman

Cary Frydman

University of Southern California - Marshall School of Business

Ian Krajbich

Ohio State University (OSU) - Department of Psychology; Ohio State University (OSU) - Department of Economics

Date Written: May 8, 2019

Abstract

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

Frydman, Cary and Krajbich, Ian, Using Response Times to Infer Others’ Beliefs: An Application to Information Cascades (May 8, 2019). Available at SSRN: https://ssrn.com/abstract=2817026 or http://dx.doi.org/10.2139/ssrn.2817026

Cary Frydman

University of Southern California - Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA 90089
United States

Ian Krajbich (Contact Author)

Ohio State University (OSU) - Department of Psychology ( email )

1835 Neil Avenue
Columbus, OH 43210
United States

Ohio State University (OSU) - Department of Economics

Arps Hall
1945 N. High St.
Columbus, OH OH 43210
United States

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