European Business Schools Librarian's Group
IESE Research Papers,
IESE Business School
No D/1117: Multi-Dimensional Social Learning
Manuel Mueller-Frank () and Itai Arieliy ()
Additional contact information
Manuel Mueller-Frank: IESE Business School, Postal: IESE Business School. Research Division, Av Pearson 21, 08034 Barcelona, SPAIN
Itai Arieliy: Faculty of Industrial Engineering, Technion- Israel Institute of Technology, Postal: Haifa, 3200003, Israel
Abstract: This paper provides a model of social learning where the order in which actions are taken is determined by an m-dimensional integer lattice rather than along a line as in the sequential social learning model. The observation structure is determined by a random network. Every agent links to each of his preceding lattice neighbors independently with probability p, and observes the actions of all agents that are reachable via a directed path in the realized social network. We establish a strong discontinuity of learning with respect to the linkage probability. If p is close to but di¤erent from one an arbitrary high proportion of agents select the optimal action in the limit, for any informative signal structure. For bounded signals and a linkage probability equal to one, however, there exists a positive probability that all agents select the suboptimal action. We also show that for every p
Keywords: Social Learning; Lattice; informational cascades
37 pages, February 27, 2015
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WP-1117-E.pdf
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