Microeconomics Seminar 2021-2022
joint with the Département de sciences économiques, Université de Montréal
Organizer : Nicolas Klein (U. of Montreal)
* Invitation only. Please contact the organizer if you would like access.
RÉSUMÉ: We consider social learning in a changing world. With state changes, society remains reactive only if it regularly acts upon fresh information, which drastically limits the value of observational learning. When the state of the world is close to persistent, a consensus in which almost all the population chooses the same action typically emerges. The consensus action is not perfectly correlated with the state though, because the society exhibits some inertia whenever the state changes. Indeed, when signals are too precise – in particular, with perfect signals – actions within a sample are too correlated and even observing unanimous samples is not informative enough to allow herding on past behavior.