Rational Groupthink
Name
1412.7172.pdf
Description
Accepted version
Size
859.94 KB
Format
Adobe PDF
Checksum (MD5)
2afc28c293a54404e1b406ae0c7678df
Author(s)
Harel, Matan
Mossel, Elchanan
Strack, Philipp
Tamuz, Omer
Date Issued
2020
Journal
Quarterly Journal of Economics
Publisher
Oxford University Press (OUP)
Version
Author's final manuscript
Abstract
We study how long-lived rational agents learn from repeatedly observing a private signal and each others' actions. With normal signals, a group of any size learns more slowly than just four agents who directly observe each others' private signals in each period. Similar results apply to general signal structures. We identify rational groupthink - in which agents ignore their private signals and choose the same action for long periods of time - as the cause of this failure of information aggregation.
MIT Department
Massachusetts Institute of Technology. Department of Mathematics
Terms of Use
Creative Commons Attribution-Noncommercial-Share Alike
Persistent DSpace Link
DOI of Published Version
https://doi.org/10.1093/QJE/QJAA026
