Social Learning and the Shadow of the Past

Journal of economic Theory, Forthcoming

34 Pages Posted: 6 May 2017 Last revised: 27 Jun 2018

See all articles by Yuval Heller

Yuval Heller

Bar Ilan University

Erik Mohlin

University of Oxford - Nuffield Department of Medicine

Date Written: June 21, 2018

Abstract

In various environments new agents may base their decisions on observations of actions taken by a few other agents in the past. In this paper we analyze a broad class of such social learning processes, and study under what circumstances the initial behavior of the population has a lasting effect. Our results show that this question strongly depends on the expected number of actions observed by new agents. Specifically, we show that if the expected number of observed actions is: (1) less than one, then the population converges to the same behavior independently of the initial state; (2) between one and two, then in some (but not all) environments there are learning rules for which the initial state has a lasting impact on future behavior; and (3) more than two, then in all environments there is a learning rule for which the initial state has a lasting impact.

Keywords: social learning, steady state, unique limiting behavior, path dependence

JEL Classification: C73, D83

Suggested Citation

Heller, Yuval and Mohlin, Erik, Social Learning and the Shadow of the Past (June 21, 2018). Journal of economic Theory, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2963618 or http://dx.doi.org/10.2139/ssrn.2963618

Yuval Heller (Contact Author)

Bar Ilan University ( email )

Dept. of Economics, Building 504
Bar Ilan University
Ramat Gan, 5290002
Israel
+972 5252 82182 (Phone)

HOME PAGE: http://https://sites.google.com/site/yuval26/

Erik Mohlin

University of Oxford - Nuffield Department of Medicine ( email )

New Road
Oxford, OX1 1NF
United Kingdom

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