Social learning under ambiguity—An experimental study

Abstract

Many behaviours spread through contact with others. The extent to which people adopt observed behaviour can critically affect whether policymakers are successful when introducing new initiatives. In many situations, people can either make decisions based on their own intuitive signals or follow a social signal. Depending on the quality of the signals, one might be more informative than the other. This study aims to better understand how people use social information to learn in ambiguous situations, when both the private and the social signal are not perfectly informative. We conduct an experimental study that observes whether people are prone to imitate others in risky and ambiguous environments. We find that individuals do learn from social information and that this learning is robust and not significantly affected by ambiguity.