Do We Follow Others when We Should? A Simple Test of Rational Expectations

American Economic Review - Tập 100 Số 5 - Trang 2340-2360 - 2010
Georg Weizsäcker1
1University College London, Economics Department, and DIW Berlin and London School of Economics, Economics Department, Mohrenstr. 58, 10117 Berlin, Germany.

Tóm tắt

The paper presents a meta dataset covering 13 experiments on social learning games. It is found that in situations where it is empirically optimal to follow others and contradict one's own information, the players err in the majority of cases, forgoing substantial parts of earnings. The average player contradicts her own signal only if the empirical odds ratio of the own signal being wrong, conditional on all available information, is larger than 2:1, rather than 1:1 as would be implied by rational expectations. A regression analysis formulates a straightforward test of rational expectations which strongly rejects the null. (JEL D82, D83, D84)

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Thông tin xuất bản

American Economic Review

Tập 100 Số 5

2340-2360

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