Rational groupthink

DOI10.1093/QJE/QJAA026MaRDI QIDQ5856721zbMATH OpenOpenAlexFDO

Authors Matan Harel, Elchanan Mossel, Philipp Strack, Omer Tamuz

Publication date 29 March 2021

Published in The Quarterly Journal of Economics (Search for Journal in Brave)

Full work available at URL https://arxiv.org/abs/1412.7172

zbMATH Keywords

failure of information aggregationobserving private signalsrational agentssocial learning

Mathematics Subject Classification ID

Social learning (91D15)

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.

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