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Error Cascades in Observational Learning: An Experiment on the Chinos Game

Feri, Francesco and Melendez-Jimenez, Miguel A and Ponti, Giovanni and Vega-Redondo, Fernando (2008) Error Cascades in Observational Learning: An Experiment on the Chinos Game. Working Paper. European University Institute Economics Working Papers ECO2008/14.

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Abstract

The paper reports an experimental study based on a variant of the popular Chinos game, which is used as a simple but paradigmatic instance of observational learning. There are three players, arranged in sequence, each of whom wins a fixed price if she manages to guess the total number of coins lying in everybody’s hands. Our evidence shows that, despite the remarkable frequency of equilibrium outcomes, deviations from optimal play are also significant. And when such deviations occur, we find that, for any given player position, the probability of a mistake is increasing in the probability of a mistake of her predecessors. This is what we call an error cascade, which we rationalize by way of a simple model of “noisy equilibrium”.

Item Type: Monograph (Working Paper)
Uncontrolled Keywords: positional learning; error cascades
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 06 Jan 2013 17:43
Last Modified: 06 Jan 2013 17:43
URI: http://repository.essex.ac.uk/id/eprint/4981

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