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Learning from the Experiments of Others Simultaneous Search, Coordination in R&D and Diffusion Processes: Laboratory Evidence

Author

Listed:
  • Niels D. Grosse

    (DFG Research Training Group "The Economics of Innovative Change", Friedrich-Schiller-University, Jena)

  • Oliver Kirchkamp

    (School for Economics and Business Administration, Friedrich-Schiller-University, Jena)

Abstract

In this paper we are studying a multiple player two-armed bandit model with two risky arms in discrete time. Players have to find the superior arm and can learn from others' history of choices and successes. In equilibrium, there is no con?ict between individual and social rationality. If agents depart from perfect rationality and use count heuristics, they can benefit from coordination (or centralization) of search activities. We test the conjecture that agents gain from coordination with a between-subject design in two treatments. In the experiments we find no gains from coordination. Instead, we find less severe deviations from the equilibrium strategy in the non-coordinated treatment.

Suggested Citation

  • Niels D. Grosse & Oliver Kirchkamp, 2009. "Learning from the Experiments of Others Simultaneous Search, Coordination in R&D and Diffusion Processes: Laboratory Evidence," Jena Economics Research Papers 2009-065, Friedrich-Schiller-University Jena.
    • Handle: RePEc:jrp:jrpwrp:2009-065
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    More about this item

    Keywords

    two-armed bandit; parallel search; coordination; experiment;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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