Learning in society

• 成果类型: Article
• 署名作者: Camargo, Braz
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2014.05.014
• 发表日期: 2014
• 页码: 381-396
• 关键词: Multi-armed bandit; social learning; strategic experimentation

摘要

In an individual experimentation problem a decision maker learns only from his own experience. It is well known that an optimal experimentation strategy for such problems sometimes results in the best alternative being dropped altogether, which is the so-called Rothschild effect. Many experimentation problems of interest, however, involve learning from both individual experience and the experience of others. This paper shows that learning in society can overcome the Rothschild effect. We consider an economy with a continuum of infinitely lived players in which each player faces a multi-armed bandit and in each period a player observes the action choice of another randomly chosen player. We show that social conformity always happens in the long run, and we use this fact to derive a condition on the distribution of prior beliefs that implies that the fraction of players who choose the best alternative always converges to one in the long run. (C) 2014 Elsevier Inc. All rights reserved.