An experimental test of observational learning under imperfect information

Abstract

Nearly all observational learning models assume that individuals can observe all the decisions that have previously been made. In reality, such perfect information is rarely available. To explore the difference between observational learning under perfect and imperfect information, this paper takes an experimental look at a situation in which individuals learn by observing the behavior of their immediate predecessors. Our experimental design uses the procedures of Çelen and Kariv [9] and is based on the theory of Çelen and Kariv [10]. We find that imitation is much less frequent when subjects have imperfect information, even less frequent than the theory predicts. Further, while we find strong evidence that under perfect information a form of generalized Bayesian behavior adequately explains behavior in the laboratory, under imperfect information behavior is not consistent even with this generalization of Bayesian behavior. Copyright Springer-Verlag Berlin/Heidelberg 2005Asymmetric information, Herd behavior, Informational cascades, Imperfect information, Experimental economics.,

An Experimental Test of Advice and Social Learning

“…In both treatments the subjects' payoffs are a function of the payoffs achieved both by themselves and by their successor, so all subjects have an incentive to offer sincere advice. For comparison purposes, we will present our new results along with the results of Çelen and Kariv (2005), which deal with the case in which each subject can observe only her immediate predecessor's action. We thus call the experiment of Çelen and Kariv (2005) the actiononly treatment.…”

“…For comparison purposes, we will present our new results along with the results of Çelen and Kariv (2005), which deal with the case in which each subject can observe only her immediate predecessor's action. We thus call the experiment of Çelen and Kariv (2005) the actiononly treatment. Aside from the information structure, the treatments containing advice are identical to the experiment of Çelen and Kariv (2005).…”

“…We thus call the experiment of Çelen and Kariv (2005) the actiononly treatment. Aside from the information structure, the treatments containing advice are identical to the experiment of Çelen and Kariv (2005). That is, all the treatments use the same procedures, but the information structure is different.…”

Imitation and luck: An experimental study on social sampling

“…More precisely, in the typical social learning experiment when it is a person's turn to act she has access to either all the decisions that have gone before her or at least a subset (see Anderson and Holt, 1997;Çelen and Kariv, 2004aÇelen and Kariv, , 2004bÇelen and Kariv, , 2005and Çelen et al, 2007 where advice is added to the conventional social learning problem). In other words, the information available to a person is exogenous and all the decision maker needs to do is to incorporate this information into her prior and make a decision.…”

The Strength of Weak Leaders An Experiment on Social Influence and Social Learning in Teams

“…Similarly, Choi et al (2005), Ç elen and, and Ç elen et al (2010) study predictions of social learning models experimentally. A caveat of this theory-testing approach is that the participants are confronted with highly stylized tasks such as guessing an average (or its sign) of randomly drawn numbers (Corazzini et al, 2012;Ç elen and Kariv, 2005;Ç elen et al, 2010) or finding an abstract true state (Choi et al, 2005;Grimm and Mengel, 2016;Chandrasekhar et al, 2016). It is questionable how the investigated learning behavior transfers to settings with real questions.…”