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Learning about informativeness

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  • Wanying Huang

Abstract

We study whether individuals can learn the informativeness of their information technology through social learning. As in the classic sequential social learning model, rational agents arrive in order and make decisions based on the past actions of others and their private signals. There is uncertainty regarding the informativeness of the common signal-generating process. We show that learning in this setting is not guaranteed, and depends crucially on the relative tail distributions of private beliefs induced by uninformative and informative signals. We identify the phenomenon of perpetual disagreement as the cause of learning and characterize learning in the canonical Gaussian environment.

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  • Wanying Huang, 2024. "Learning about informativeness," Papers 2406.05299, arXiv.org.
    • Handle: RePEc:arx:papers:2406.05299
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    References listed on IDEAS

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    1. Bikhchandani, Sushil & Hirshleifer, David & Welch, Ivo, 1992. "A Theory of Fads, Fashion, Custom, and Cultural Change in Informational Cascades," Journal of Political Economy, University of Chicago Press, vol. 100(5), pages 992-1026, October.
    2. J. Aislinn Bohren & Daniel N. Hauser, 2021. "Learning With Heterogeneous Misspecified Models: Characterization and Robustness," Econometrica, Econometric Society, vol. 89(6), pages 3025-3077, November.
    3. Bohren, Aislinn & Hauser, Daniel, 2017. "Learning with Heterogeneous Misspecified Models: Characterization and Robustness," CEPR Discussion Papers 12036, C.E.P.R. Discussion Papers.
    4. Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(3), pages 797-817.
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