14th journées Louis-André Gérard-Varet

Font Size: 
Lone Wolf or Herd Animal? An Experiment on Choice of Information and Social Learning
John Duffy, Ed Hopkins, Tatiana Kornienko

Last modified: 2015-03-15

Abstract


We report on an experiment that uses revealed preference to distinguish between rational social learning and behavioral bias. Subjects must choose between receiving a private signal or observing the past guesses of other subjects before guessing the state of the world. The design varies the persistence of the state across time. This changes whether choosing social or private information is optimal. We can therefore separate subjects who choose optimally from both those who excessively use social information ("herd animals") and those with excessive use of private information ("lone wolves"). While aggregate behavior appears unbiased, this is because the numbers of lone wolves and herd animals are approximately equal.


Keywords


social learning; information; experiments; conformity; social influence