Social learning from private experiences: The dynamics of the selection problem

Charles F. Manski*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

29 Scopus citations

Abstract

I analyse social interactions that stem from the successive endeavours of new cohorts of heterogeneous decision makers to learn from the experiences of past cohorts. A dynamic process of information accumulation and decision making occurs as the members of each cohort observe the experiences of earlier ones, and then make choices that yield experiences observable by future cohorts. Decision makers face the selection problem as they seek to learn from observation of past actions and outcomes, while not observing the counterfactual outcomes that would have occurred had other actions been chosen. Assuming that all cohorts face the same outcome distributions, I show that social learning is a process of sequential reduction in ambiguity. The specific nature of this process, and its terminal state, depend critically on how decision makers make choices under ambiguity. I use the problem of learning about innovations to illustrate.

Original languageEnglish (US)
Pages (from-to)443-458
Number of pages16
JournalReview of Economic Studies
Volume71
Issue number2
DOIs
StatePublished - Apr 2004

ASJC Scopus subject areas

  • Economics and Econometrics

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