A Practical Approach to Social Learning
Theoretical Economics
2020-02-26 v1 Social and Information Networks
Econometrics
General Economics
Economics
Abstract
Models of social learning feature either binary signals or abstract signal structures often deprived of micro-foundations. Both models are limited when analyzing interim results or performing empirical analysis. We present a method of generating signal structures which are richer than the binary model, yet are tractable enough to perform simulations and empirical analysis. We demonstrate the method's usability by revisiting two classical papers: (1) we discuss the economic significance of unbounded signals Smith and Sorensen (2000); (2) we use experimental data from Anderson and Holt (1997) to perform econometric analysis. Additionally, we provide a necessary and sufficient condition for the occurrence of action cascades.
Cite
@article{arxiv.2002.11017,
title = {A Practical Approach to Social Learning},
author = {Amir Ban and Moran Koren},
journal= {arXiv preprint arXiv:2002.11017},
year = {2020}
}