Impressions on Goeree et al (2006)

Title: Social learning with private and common values. Link to the paper.

Authors: Goeree, Palfrey, Rogers

Year published: 2006

Journal: Economic Theory

This paper is an attempt to expand the "classic" results on social learning that started with Bikhchandani et al (1992) and Banerjee (1992). Unlike the other papers in this field, Goeree et al (2006) allow for the following things:

I have some hang-ups about this paper from a casual reading in a rather uncomfortable cafe so maybe my impressions would change upon a re-reading.

  1. The evolution private beliefs of the agents seem to be completely driven by the public beliefs of the agent
  2. In this sense I do not understand why it is necessary to make a distinction between the private and public beliefs
  3. The assertion is that "learning never ceases" in that the public beliefs between t and t+1 are never identical for any t
    1. But even then this seems to be driven by the randomness of the private valuation realizations
    2. Basically as long as someone makes a major mistake (in the sense that the public valuation completely overwhelms the common valuation), then "mistakes" allow people to "keep learning" about the true state
  4. So basically it seems that the private vs. public belief distinction is unimportant - that the private valuation drives the results

Interesting things to look at later