Social learning and the shadow of the past

Yuval Heller; Erik Mohlin

doi:10.1016/j.jet.2018.07.003

Social learning and the shadow of the past

Yuval Heller, Erik Mohlin

Department of Economics

Lund University

Research output: Contribution to journal › Article › peer-review

6 Scopus citations

Abstract

In various environments new agents may base their decisions on observations of actions taken by a few other agents in the past. In this paper we analyze a broad class of such social learning processes, and study under what circumstances the initial behavior of the population has a lasting effect. Our results show that this question strongly depends on the expected number of actions observed by new agents. Specifically, we show that if the expected number of observed actions is: (1) less than one, then the population converges to the same behavior independently of the initial state; (2) between one and two, then in some (but not all) environments there are decision rules for which the initial state has a lasting impact on future behavior; and (3) more than two, then in all environments there is a decision rule for which the initial state has a lasting impact.

Original language	English
Pages (from-to)	426-460
Number of pages	35
Journal	Journal of Economic Theory
Volume	177
DOIs	https://doi.org/10.1016/j.jet.2018.07.003
State	Published - Sep 2018

Bibliographical note

Publisher Copyright:
© 2018 Elsevier Inc.

Funding

Old versions of this paper were previously titled “When Is Social Learning Path-Dependent?” and “Unique Stationary Behavior.” We thank Ron Peretz, Doron Ravid, Satoru Takahashi, Xiangqian Yang, Peyton Young, an associate editor, and a referee for valuable discussions and helpful suggestions. Yuval Heller is grateful to the European Research Council for its financial support (ERC starting grant #677057). Erik Mohlin is grateful to Handelsbankens forskningsstiftelser (grant #P2016-0079:1), the Swedish Research Council (grant #2015-01751), and the Knut and Alice Wallenberg Foundation (Wallenberg Academy Fellowship #2016-0156) for their financial support.

Funders	Funder number
Horizon 2020 Framework Programme	677057
European Commission
Knut och Alice Wallenbergs Stiftelse	2016-0156
Vetenskapsrådet	2015-01751

Keywords

Path dependence
Social learning
Steady state
Unique limiting behavior

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10.1016/j.jet.2018.07.003

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Social learning and the shadow of the past

Abstract

Bibliographical note

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Keywords

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