Superstition and Rational Learning
Fudenberg, Drew, and
David K. Levine. 2006. "Superstition and Rational Learning."
American Economic Review,
We argue that some, but not all, superstitions can persist when learning is rational
and players are patient, and illustrate our argument with an example inspired by the
Code of Hammurabi. The code specified an "appeal by surviving in the river" as a
way of deciding whether an accusation was true. According to our theory, a
mechanism that uses superstitions two or more steps off the equilibrium path, such
as "appeal by surviving in the river," is more likely to persist than a superstition
where the false beliefs are only one step off the equilibrium path. (JEL C72, C73,
Article Full-Text Access
Levine, David K.