Communication with Unknown Perspectives

Consider a group of individuals with unobservable perspectives (subjective prior beliefs) about a sequence of states. In each period, each individual receives private information about the current state and forms an opinion (a posterior belief). She also chooses a target individual and observes the target's opinion. This choice involves a trade-off between well-informed targets, whose signals are precise, and well-understood targets, whose perspectives are well known. Opinions are informative about the target's perspective, so observed individuals become better understood over time. We identify a simple condition under which long-run behavior is history independent. When this fails, each individual restricts attention to a small set of experts and observes the most informed among these. A broad range of observational patterns can arise with positive probability, including opinion leadership and information segregation. In an application to areas of expertise, we show how these mechanisms generate own-field bias and large field dominance.

[1]  Daron Acemoglu,et al.  Fragility of Asymptotic Agreement Under Bayesian Learning , 2008 .

[2]  Muhamet Yildiz,et al.  Public Disagreement , 2009 .

[3]  Wray L. Buntine,et al.  Learning In Networks , 1995 .

[4]  A. Banerjee,et al.  A Simple Model of Herd Behavior , 1992 .

[5]  Debraj Ray,et al.  Bureau for Research and Economic Analysis of DevelopmentInformal Insurance in Social Networks , 2005 .

[6]  E. Phelps.  The Statistical Theory of Racism and Sexism , 1972 .

[7]  N. Pimlott.  Learning from the neighbours. , 2012, Canadian family physician Medecin de famille canadien.

[8]  Yann Bramoullé,et al.  Public goods in networks , 2007, J. Econ. Theory.

[9]  Joan de Martí,et al.  Communication and influence , 2015 .

[10]  Eric Van den Steen,et al.  Culture Clash: The Costs and Benefits of Homogeneity , 2009, Manag. Sci..

[11]  P. DeMarzo,et al.  Persuasion Bias, Social Influence, and Uni-Dimensional Opinions , 2001 .

[12]  Navin Kartik,et al.  Opinions as Incentives , 2009, Journal of Political Economy.

[13]  D. Aigner,et al.  Statistical Theories of Discrimination in Labor Markets , 1977 .

[14]  Sanjeev Goyal,et al.  A Noncooperative Model of Network Formation , 2000 .

[15]  Douglas Gale,et al.  Bayesian learning in social networks , 2003, Games Econ. Behav..

[16]  Ali Jadbabaie,et al.  Non-Bayesian Social Learning , 2011, Games Econ. Behav..

[17]  S. Bikhchandani,et al.  You have printed the following article : A Theory of Fads , Fashion , Custom , and Cultural Change as Informational Cascades , 2007 .

[18]  Ivo Welch,et al.  Culture, Information, and Screening Discrimination , 1996, Journal of Political Economy.

[19]  David P. Myatt,et al.  The Qualities of Leadership: Direction, Communication, and Obfuscation , 2007, American Political Science Review.

[20]  Susan H. Xu,et al.  Technology diffusion by learning from neighbours , 2004, Advances in Applied Probability.

[21]  A. Galeotti,et al.  Rational Inattention and Organizational Focus , 2013 .

[22]  J. Sobel,et al.  STRATEGIC INFORMATION TRANSMISSION , 1982 .

[23]  Lones Smith,et al.  Pathological Outcomes of Observational Learning , 2000 .

[24]  Formation of networks and coalitions , 2011 .

[25]  A. Galeotti,et al.  The Law of the Few , 2010 .

[26]  Leeat Yariv,et al.  Homophily in Peer Groups , 2012 .

[27]  M. Degroot.  Reaching a Consensus , 1974 .

[28]  Alison Watts,et al.  A Dynamic Model of Network Formation , 2001, Games Econ. Behav..

[29]  Matthew O. Jackson,et al.  Naïve Learning in Social Networks and the Wisdom of Crowds , 2010 .

[30]  J. Weibull,et al.  Political polarization , 2007, Proceedings of the National Academy of Sciences.

[31]  M. Jackson,et al.  A Strategic Model of Social and Economic Networks , 1996 .

[32]  Matthew O. Jackson,et al.  An Overview of Social Networks and Economic Applications , 2011 .