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Games and Economic Behavior
Standard economic models assume that the weight given to information from different sources depends exclusively on its diagnosticity. In this paper we study whether the same piece of information is weighted more heavily simply because it arose from direct experience rather than from observation. We investigate this possibility by conducting repeated game experiments in which groups of players are randomly rematched on every round and receive feedback about the actions and outcomes of all players. We find that participants' actions are influenced more strongly by the behavior of players they directly interact with than by those they only observe.
© . This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
experiential learning, observational learning, repeated games, prisoner dilemma, weak-link, behavioral economics
Simonsohn, U., Karlsson, N., Loewenstein, G., & Ariely, D. (2008). The Tree of Experience in the Forest of Information: Overweighing Experienced Relative to Observed Information. Games and Economic Behavior, 62 (1), 263-286. http://dx.doi.org/10.1016/j.geb.2007.03.010
Date Posted: 27 November 2017
This document has been peer reviewed.