SMU SOE Seminar (Mar 8, 2018): Updating Ambiguous Beliefs in a Social Learning Experiment

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ABSTRACT We present a social learning experiment in which subjects predict the value of a good in sequence. We elicit each subject’s belief twice: first (“first belief”), after he observes his predecessors’ prediction; second, after he also observes a private signal. Our main result is that subjects update on their signal asymmetrically. They weigh the private signal as a Bayesian agent when it confirms their first belief and overweight it when it contradicts their first belief. This way of updating, incompatible with Bayesianism, can be explained by ambiguous beliefs (multiple priors on the predecessor’s rationality) and a generalization of the Maximum Likelihood Updating rule. Our experiment allows for a better understanding of the overweighting of private information documented in previous studies. Click here to view the paper. Click here to view the CV.
		PRESENTER Toru Kitagawa University College London
		RESEARCH FIELDS Econometric Theory Applied Econometrics
		DATE: 8 March 2018 (Thursday)
		TIME: 4pm - 5.30pm
		VENUE: Meeting Room 5.1, Level 5 School of Economics Singapore Management University 90 Stamford Road Singapore 178903