The Implications of Pricing on Social Learning

• Tác giả: Itai Arieli, Moran Koren, Rann Smorodinsky
• Ngôn ngữ: eng
• Ký hiệu phân loại: 155.92 Influence of social environment
• Thông tin xuất bản: 2019
• Bộ sưu tập: Báo, Tạp chí
• ID: 162885

Tóm tắt

We study the implications of endogenous pricing for learning and welfare in the classic herding model . When prices are determined exogenously, it is known that learning occurs if and only if signals are unbounded. By contrast, we show that learning can occur when signals are bounded as long as non-conformism among consumers is scarce. More formally, learning happens if and only if signals exhibit the vanishing likelihood property introduced bellow. We discuss the implications of our results for potential market failure in the context of Schumpeterian growth with uncertainty over the value of innovations.