Superstition and Rational Learning
43 Pages Posted: 7 Mar 2006
Date Written: March 2006
We argue that some but not all superstitions can persist when learning is rational and players are patient, and illustrate our argument with an example inspired by the code of Hammurabi. The code specified an appeal by surviving in the river as a way of deciding whether an accusation was true, so it seems to have relied on the superstition that the guilty are more likely to drown than the innocent. If people can be easily persuaded to hold this superstitious belief, why not the superstitious belief that the guilty will be struck dead by lightning? We argue that the former can persist but the latter cannot by giving a partial characterization of the outcomes that arise as the limit of steady states with rational learning as players become more patient. These 'subgame-confirmed Nash equilibria' have self-confirming beliefs at information sets reachable by a single deviation. According to this theory a mechanism that uses superstitions two or more steps off the equilibrium path, such as 'appeal by surviving in the river', is more likely to persist than a superstition where the false beliefs are only one step off of the equilibrium path.
Suggested Citation: Suggested Citation