Research Archive

An Experimental Test of Advice and Social Learning

Bogachan Celen, Shachar Kariv, Andrew Schotter

Publication type: Journal article

Research Archive Topic: Business Economics and Public Policy, Organizations


Social learning is the process of individuals learning by observing the actions of others. One odd aspect of the literature on social learning though is that, ironically, learning is not very social because in the real world, although people learn by observing the actions of others, they also learn from advice. This paper introduces the giving of advice into a standard social-learning problem. The experiment is designed so that both pieces of information—action and advice—are equally informative (in fact, identical) in equilibrium. In the laboratory, in contrast, subjects are more willing to follow the advice given to them by their predecessors than to copy their actions, and subjects' behavior is more consistent with the prediction of the theory. Consequently, advice is both more informative and welfare improving than action.
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Celen, Boğachan, Shachar Kariv, and Andrew Schotter. "An Experimental Test of Advice and Social Learning." Management Science 56, no. 10 (October 2010): 1687-1701.

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