learning and information aggregation in networks
From The New Palgrave Dictionary of Economics, Second Edition, 2008
Edited by
Steven
N.
Durlauf
and
Lawrence
E.
Blume
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Abstract
‘Social learning’ is a process whereby economic agents learn by observing the behaviour of others. ‘Social learning in networks’ requires sophistication because individuals draw inferences from the behaviour of agents they cannot directly observe. Theoretical research suggests that, even if networks are very incomplete, social learning leads to uniform behaviour. Experimental evidence suggests that learning in networks conforms quite well to theoretical predictions. It also illustrates how the network architecture influences the pattern of learning and the efficiency of information aggregation.
Keywords
Bala–Goyal model; bounded rationality; circle network; complete network; connected graph; directed graph; Griliches, Z.; herd behavior; hubs; imitation principle; information aggregation; informational cascades; perfect information; pure information externality; scale-free networks; social experimentation; social learning; star network
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How to cite this article
Gale, Douglas and Shachar Kariv. "learning and information aggregation in networks." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 23 May 2013 <http://www.dictionaryofeconomics.com/article?id=pde2008_L000218> doi:10.1057/9780230226203.0952

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