Information Redundancy Neglect versus Overconfidence: A Social Learning Experiment
- American Economic Journal: Microeconomics (Forthcoming)
We study social learning in a continuous action space experiment.
Subjects, acting in sequence, state their belief about the value of a good,
after observing their predecessors' statements and a private signal. We
compare the behavior in the laboratory with the Perfect Bayesian Equilibrium prediction and the predictions of bounded rationality models of
decision making: the redundancy of information neglect model and the
overconfidence model. The results of our experiment are in line with the
predictions of the overconfidence model and at odds with the others'.
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