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An Experiment on Network Density and Sequential Learning

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  • Krishna Dasaratha
  • Kevin He

Abstract

We conduct a sequential social-learning experiment where subjects each guess a hidden state based on private signals and the guesses of a subset of their predecessors. A network determines the observable predecessors, and we compare subjects' accuracy on sparse and dense networks. Accuracy gains from social learning are twice as large on sparse networks compared to dense networks. Models of naive inference where agents ignore correlation between observations predict this comparative static in network density, while the finding is difficult to reconcile with rational-learning models.

Suggested Citation

  • Krishna Dasaratha & Kevin He, 2019. "An Experiment on Network Density and Sequential Learning," Papers 1909.02220, arXiv.org, revised May 2021.
  • Handle: RePEc:arx:papers:1909.02220
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    References listed on IDEAS

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    1. Dasaratha, Krishna & He, Kevin, 2020. "Network structure and naive sequential learning," Theoretical Economics, Econometric Society, vol. 15(2), May.
    2. Georg Weizsacker, 2010. "Do We Follow Others When We Should? A Simple Test of Rational Expectations," American Economic Review, American Economic Association, vol. 100(5), pages 2340-2360, December.
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    7. Erik Eyster & Matthew Rabin, 2010. "Naïve Herding in Rich-Information Settings," American Economic Journal: Microeconomics, American Economic Association, vol. 2(4), pages 221-243, November.
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    9. Arun G. Chandrasekhar & Horacio Larreguy & Juan Pablo Xandri, 2020. "Testing Models of Social Learning on Networks: Evidence From Two Experiments," Econometrica, Econometric Society, vol. 88(1), pages 1-32, January.
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    Cited by:

    1. Dasaratha, Krishna & He, Kevin, 2020. "Network structure and naive sequential learning," Theoretical Economics, Econometric Society, vol. 15(2), May.
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