Higher-Order Learning

54 Pages Posted: 23 Dec 2018 Last revised: 12 Mar 2019

See all articles by Piotr Evdokimov

Piotr Evdokimov

Instituto Tecnológico Autónomo de México (ITAM) - Centro de Investigacion Economica

Umberto Garfagnini

University of Surrey - School of Economics

Date Written: March 8, 2019

Abstract

We use a novel experimental design to study how players update their beliefs about the beliefs of others. We find that higher-order beliefs respond to information about how lower-order beliefs are formed and are updated more slowly when a player faces uncertainty about others' information. We also identify a novel behavioral bias: Higher-order beliefs become less accurate over time, even as more information becomes available. We argue that this is driven by a failure of theory of mind, i.e., a failure of players to correctly predict the way in which others form beliefs.

Keywords: Higher-order beliefs, learning, theory of mind

JEL Classification: C90, D83, D89

Suggested Citation

Evdokimov, Piotr and Garfagnini, Umberto, Higher-Order Learning (March 8, 2019). Available at SSRN: https://ssrn.com/abstract=3296226 or http://dx.doi.org/10.2139/ssrn.3296226

Piotr Evdokimov

Instituto Tecnológico Autónomo de México (ITAM) - Centro de Investigacion Economica ( email )

Av. Camino a Santa Teresa #930
Col. Heroes de Padierna
Mexico City, D.F. 10370
Mexico

Umberto Garfagnini (Contact Author)

University of Surrey - School of Economics ( email )

Guildford
Guildford, Surrey GU2 5XH
United Kingdom

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