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Rational Groupthink

Harel, Matan and Mossel, Elchanan and Strack, Philipp and Tamuz, Omer (2021) Rational Groupthink. Quarterly Journal of Economics, 136 (1). pp. 621-668. ISSN 0033-5533. https://resolver.caltech.edu/CaltechAUTHORS:20161111-135545798

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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.


Item Type:Article
Related URLs:
URLURL TypeDescription
https://doi.org/10.1093/qje/qjaa026 DOIArticle
https://arxiv.org/abs/1412.7172arXivDiscussion Paper
ORCID:
AuthorORCID
Mossel, Elchanan0000-0001-7812-7886
Strack, Philipp0000-0002-7960-9243
Tamuz, Omer0000-0002-0111-0418
Alternate Title:On the Speed of Social Learning, When more information reduces the speed of learning, The Speed of Social Learning, Groupthink and the Failure of Information Aggregation in Large Groups
Additional Information:© The Author(s) 2020. Published by Oxford University Press on behalf of the President and Fellows of Harvard College. This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/open_access/funder_policies/chorus/standard_publication_model). Published: 08 July 2020. We thank seminar audiences in Berkeley, Berlin, Bonn, Caltech, Chicago, Düsseldorf, Duke, Harvard, Medellın, Microsoft Research New England, MIT, Montreal, NYU, Penn State, Pittsburgh, Princeton, San Diego, UPenn, USC, Washington University, and Yale, as well as Nageeb Ali, Ben Brooks, Dirk Bergemann, Kim Border, Federico Echenique, Wade Hann-Caruthers, Benjamin Golub, RainieHeck, Paul Heidhues, Shachar Kariv, Navin Kartik, StevenMorris, Luciano Pomatto, Larry Samuelson, Lones Smith, Juuso Toikka, Leeat Yariv, and others for insightful comments and discussions. Matan Harel was partially supported by the IDEX grant of Paris-Saclay. Elchanan Mossel is supported by ONR grant N00014-16-1-2227 and NSF grant CCF 1320105. Omer Tamuz was supported by a grant from the Simons Foundation (#419427).
Funders:
Funding AgencyGrant Number
Paris-SaclayUNSPECIFIED
Office of Naval Research (ONR)N00014-16-1-2227
NSFCCF-1320105
Simons Foundation419427
Issue or Number:1
Classification Code:JEL Code: D83
Record Number:CaltechAUTHORS:20161111-135545798
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20161111-135545798
Official Citation:Matan Harel, Elchanan Mossel, Philipp Strack, Omer Tamuz, Rational Groupthink, The Quarterly Journal of Economics, Volume 136, Issue 1, February 2021, Pages 621–668, https://doi.org/10.1093/qje/qjaa026
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:71957
Collection:CaltechAUTHORS
Deposited By: Tony Diaz
Deposited On:16 Nov 2016 00:42
Last Modified:24 Mar 2021 18:17

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