Social Learning with State-Dependent Observations
- Author(s)
- Carl Heese
- Abstract
In this note, I study a variant of the canonical binary-state binary-choice social learning model (Bikhchandani et al., 1992). An individual would like to choose an action only in the high state. When making her own decision, she observes previous decision-makers who chose the action. Importantly, the likelihood of observing the action of previous decision-maker depends on the state. I show that when observing the action is more likely in the low state, the individual faces an inference problem: does she observe many actions because the state is high and previous decision-makers had private information about this or because the state is low and previous actions are more visible. In this situation, learning is confounded (Smith and Sorensen, 2000).
- Organisation(s)
- Department of Economics
- No. of pages
- 5
- Publication date
- 10-2020
- Austrian Fields of Science 2012
- 502021 Microeconomics
- Keywords
- Portal url
- https://ucrisportal.univie.ac.at/en/publications/9422fcee-3307-4fdd-9161-7d1388ee0d66