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Stationary Social Learning in a Changing Environment

Author

Listed:
  • Raphaël Levy
  • Marcin Pęski
  • Nicolas Vieille

Abstract

We consider social learning in a changing world. With changing states, societies can be responsive only if agents regularly act upon fresh information, which significantly limits the value of observational learning. When the state is close to persistent, a consensus whereby most agents choose the same action typically emerges. However, the consensus action is not perfectly correlated with the state, because societies exhibit inertia following state changes. When signals are precise enough, learning is incomplete, even if agents draw large samples of past actions, as actions then become too correlated within samples, thereby reducing informativeness and welfare.

Suggested Citation

  • Raphaël Levy & Marcin Pęski & Nicolas Vieille, 2024. "Stationary Social Learning in a Changing Environment," Econometrica, Econometric Society, vol. 92(6), pages 1939-1966, November.
    • Handle: RePEc:wly:emetrp:v:92:y:2024:i:6:p:1939-1966
    DOI: 10.3982/ECTA20475
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    References listed on IDEAS

    as
    1. Raphael L'evy & Marcin Pk{e}ski & Nicolas Vieille, 2022. "Stationary social learning in a changing environment," Papers 2201.02122, arXiv.org.
    2. Marco Ottaviani & Giuseppe Moscarini & Lones Smith, 1998. "Social learning in a changing world," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 11(3), pages 657-665.
    3. Wanying Huang, 2022. "The Emergence of Fads in a Changing World," Papers 2208.14570, arXiv.org, revised Nov 2024.
    4. Xavier Vives, 1993. "How Fast do Rational Agents Learn?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(2), pages 329-347.
    5. Raphaël Levy & Marcin Pęski & Nicolas Vieille, 2022. "Stationary social learning in a changing environment," Working Papers hal-03837075, HAL.
    Full references (including those not matched with items on IDEAS)

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