Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: Nov, 2019, Volume 87, Issue 6

On the Efficiency of Social Learning
p. 2141-2168

Dinah Rosenberg, Nicolas Vieille

We revisit prominent learning models in which a sequence of agents make a binary decision on the basis of both a private signal and information related to past choices. We analyze the efficiency of learning in these models, measured in terms of the expected welfare. We show that, irrespective of the distribution of private signals, learning efficiency is the same whether each agent observes the entire sequence of earlier decisions or only the previous decision. In addition, we provide a simple condition on the signal distributions that is necessary and sufficient for learning efficiency. This condition fails to hold in many cases of interest. We discuss a number of extensions and variants.

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Supplemental Material

Supplement to "On the Efficiency of Social Learning"

This file contains the proofs of the statements of "on the efficiency of online learning", with the exception of Theorem 2, which is proven in the main paper.