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Public and Private Information: An Experimental Study of Information Pooling

McKelvey, Richard D. and Page, Talbot (1989) Public and Private Information: An Experimental Study of Information Pooling. Social Science Working Paper, 696. California Institute of Technology , Pasadena, CA. (Unpublished)

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This paper reports on an experimental study of-the way in which individuals make inferences from publicly available information. We compare the predictions of a theoretical model of a common knowledge inference process with actual behavior. In the theoretical model, "perfect Bayesians," starting with private information, take actions; an aggregate statistic is made publicly available; the individuals do optimal Bayesian updating and take new actions; and the process continues until there is a common knowledge equilibrium with complete information pooling. We find that the theoretical model roughly predicts the observed behavior, but the actual inference process is clearly less efficient than the standard of the theoretical model, and while there is some pooling, it is incomplete.

Item Type:Report or Paper (Working Paper)
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URLURL TypeDescription ItemPublished Version
Additional Information:Published as McKelvey, Richard D., and Talbot Page. "Public and private information: An experimental study of information pooling." Econometrica: Journal of the Econometric Society (1990): 1321-1339.
Group:Social Science Working Papers
Subject Keywords:Information Pooling, Common Knowledge, Bayesian Learning
Series Name:Social Science Working Paper
Issue or Number:696
Classification Code:JEL: 026
Record Number:CaltechAUTHORS:20170905-141058732
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:81147
Deposited By: Jacquelyn Bussone
Deposited On:05 Sep 2017 22:30
Last Modified:03 Oct 2019 18:39

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