Pathological Outcomes of Observational Learning Export

@article{Smith:2000, abstract = {This paper explores how Bayes-rational individuals learn sequentially from the discrete actions of others. Unlike earlier informational herding papers, we admit heterogeneous preferences. Not only may type-specific "herds" eventually arise, but a new robust possibility emerges: confounded learning. Beliefs may converge to a limit point where history offers no decisive lessons for anyone, and each type's actions forever nontrivially split between two actions. To verify that our identified limit outcomes do arise, we exploit the Markov-martingale character of beliefs. Learning dynamics are stochastically stable near a fixed point in many Bayesian learning models like this one.}, author = {Smith, Lones and Sorensen, Peter}, citeulike-article-id = {5943823}, citeulike-linkout-0 = {http://dx.doi.org/10.2307/2999431}, citeulike-linkout-1 = {http://www.jstor.org/stable/2999431}, doi = {10.2307/2999431}, issn = {00129682}, journal = {Econometrica}, keywords = {economics, social\_learning}, number = {2}, pages = {371--398}, posted-at = {2009-10-15 13:43:25}, priority = {2}, publisher = {The Econometric Society}, title = {Pathological Outcomes of Observational Learning}, url = {http://dx.doi.org/10.2307/2999431}, volume = {68}, year = {2000} }

TY - JOUR ID - Smith:2000 L3 - citeulike-article-id:5943823 N2 - This paper explores how Bayes-rational individuals learn sequentially from the discrete actions of others. Unlike earlier informational herding papers, we admit heterogeneous preferences. Not only may type-specific "herds" eventually arise, but a new robust possibility emerges: confounded learning. Beliefs may converge to a limit point where history offers no decisive lessons for anyone, and each type's actions forever nontrivially split between two actions. To verify that our identified limit outcomes do arise, we exploit the Markov-martingale character of beliefs. Learning dynamics are stochastically stable near a fixed point in many Bayesian learning models like this one. IS - 2 JF - Econometrica SN - 00129682 EP - 398 TI - Pathological Outcomes of Observational Learning PB - The Econometric Society VL - 68 SP - 371 KW - economics KW - social_learning AU - Smith, Lones AU - Sorensen, Peter PY - 2000/// UR - http://dx.doi.org/10.2307/2999431 ER -