Social learning with endogenous observation

• 成果类型: Article
• 署名作者: Song, Yangbo
• 署名单位: The Chinese University of Hong Kong, Shenzhen
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2016.09.005
• 发表日期: 2016
• 页码: 324-333
• 关键词: Information aggregation; social learning; herding; Information cascade; information acquisition

摘要

I study the problem of social learning in a model where agents move sequentially. Each agent receives a private signal about the underlying state of the world, observes the past actions in a neighborhood of individuals, and chooses her action attempting to match the true state. In contrast to the most existing literature that assumes an exogenous observation structure, observation in this paper is endogenous. More specifically, each agent must pay a cost to make any observation and can strategically choose the set of actions to observe. I show that when private beliefs are strong relative to cost, observation becomes fully informative if and only if the size of the observed actions extends to infinity. In addition, costly observation may lead to better learning than free observation, and the order of acquiring signal and observation significantly affects the learning pattern: (C) 2016 Elsevier Inc. All rights reserved.