This paper develops a general framework to study how misinterpreting information impacts learning. We consider sequential social learning and passive individual learning settings in which individuals observe signals and the actions of predecessors. Individuals have incorrect, or misspecified...

This paper develops a general framework to study how misinterpreting information impacts learning. Our main result is a simple criterion to characterize long-run beliefs based on the underlying form of misspecification. We present this characterization in the context of social learning, then...

This paper demonstrates that a misspecified model of information processing interferes with long-run learning and allows inefficient choices to persist in the face of contradictory public information. I consider an observational learning environment where agents observe a private signal about a...

This paper demonstrates that a misspecified model of information processing interferes with long-run learning and offers an explanation for why individuals may continue to choose an inefficient action, despite sufficient public information to learn the true state. I consider a social learning...