We study social learning and innovation in an overlapping generations model, emphasizing the trade-off between marginal innovation (combining existing technologies) and radical innovation (breaking new ground). We characterize both short-term and long-term dynamics of innovation, and the...

We study social learning and innovation in an overlapping generations model, emphasizing the trade-off between marginal innovation (combining existing technologies) and radical innovation (breaking new ground). We characterize both short-term and long-term dynamics of innovation, and the...

We study the effectiveness of social learning when subjects can also learn individually. In the baseline treatment, a subject observes a sequence of private signals about an unknown state of the world and chooses an action to match the state. In the unilateral social learning treatment, a...

This paper proposes a simple approach to recover cognitive attention costs in information processing from elicited beliefs. Applying the empirical strategy to experimental data on a belief updating task, I find that about 25% of the subjects behave as if facing positive attention costs. The...

We design a novel experiment to study how subjects update their beliefs about the beliefs of others. Three players receive sequential signals about an unknown state of the world. Player 1 reports her beliefs about the state; Player 2 simultaneously reports her beliefs about the beliefs of Player...