Rational Groupthink
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.
Document Details
- Document Type
- Pub Defense Publication
- Publication Date
- Jul 08, 2020
- Source ID
- 10.1093/qje/qjaa026
Entities
People
- Elchanan Mossel
- Matan Harel
- Omer Tamuz
- Philipp Strack
Organizations
- California Institute of Technology
- Massachusetts Institute of Technology
- National Science Foundation
- Office of Naval Research
- Simons Foundation
- Tel Aviv University
- Yale University