Informational Herding and Optimal Experimentation

We explore the constrained efficient observational learning model - as when individuals care about successors, or are so induced by an informationlly-constrained social planner. We find that when the herding externality is correctly internalized in this fashion, incorrect herds still obtain. To describe behaviour in this model, we exhibit a set of indices that capture the privately extimated social value of every action.

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Year of publication:	1997
Authors:	Smith, L. ; Sorensen, P.
Institutions:	Economics Group, Nuffield College, University of Oxford
Subject:	LEARNING \| INFORMATION \| EXPERIMENTATION

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Series:	Economics Papers.
Type of publication:	Book / Working Paper
Notes:	24 pages
Classification:	C90 - Design of Experiments. General ; D83 - Search, Learning, Information and Knowledge
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005812252