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- W4200328206 abstract "Abstract We design a novel experiment to study how subjects update their beliefs about the beliefs of others. Three players receive sequential signals about an unknown state of the world. Player 1 reports her beliefs about the state; Player 2 simultaneously reports her beliefs about the beliefs of Player 1; Player 3 simultaneously reports her beliefs about the beliefs of Player 2. We say that beliefs exhibit higher-order learning if the beliefs of Player k about the beliefs of Player $$k-1$$ <mml:math xmlns:mml=http://www.w3.org/1998/Math/MathML> <mml:mrow> <mml:mi>k</mml:mi> <mml:mo>-</mml:mo> <mml:mn>1</mml:mn> </mml:mrow> </mml:math> become more accurate as more signals are observed. We find that some of the predicted dynamics of higher-order beliefs are reflected in the data; in particular, higher-order beliefs are updated more slowly with private than public information. However, higher-order learning fails even after a large number of signals is observed. We argue that this result is driven by base-rate neglect, heterogeneity in updating processes, and subjects’ failure to correctly take learning rules of others into account." @default.
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- W4200328206 date "2021-12-26" @default.
- W4200328206 modified "2023-09-26" @default.
- W4200328206 title "Higher-order learning" @default.
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- W4200328206 doi "https://doi.org/10.1007/s10683-021-09743-6" @default.
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