Social Learning in Beauty‐Contest Games |
| |
Authors: | Martin Kocher Matthias Sutter Florian Wakolbinger |
| |
Institution: | 1. University of Gothenburg;2. CESifo, Munich;3. and University of Munich, Department of Economics, Geschwister-Scholl-Platz 1, Munich 80539 Germany;4. and University of Innsbruck, Department of Public Economics, Universit?tsstra?e 15/4, Innsbruck 6020 Austria;5. University of Linz, Department of Economics—Public Economics, Altenbergerstra?e 69, Linz 4040 Austria |
| |
Abstract: | We study the impact of social learning on the depth of reasoning in an experimental beauty‐contest game. Naive advice and observation of others' decisions as two forms of social learning trigger faster convergence to the equilibrium. We find that subjects who receive advice outperform uninformed subjects permanently, whereas subjects who observe others' past behavior before making their decision only have a temporary advantage over uninformed subjects. A series of control‐treatments and simulations indicate that the latter result is due to subjects failing to make the most out of observing others. |
| |
Keywords: | C70 C72 C91 |
|
|