Arbeitspapier

Imitation in Heterogeneous Populations

We study a boundedly rational model of imitation when payoff distributions of actions differ across types of individuals. Individuals observe others’ actions and payoffs, and a comparison signal. One of two inefficiencies always arises: (i) uniform adoption, i.e., all individuals choose the action that is optimal for one type but sub-optimal for the other, or (ii) dual incomplete learning, i.e., only a fraction of each type chooses its optimal action. Which one occurs depends on the composition of the population and how critical the choice is for different types of individuals. In an application, we show that a monopolist serving a population of boundedly rational consumers cannot fully extract the surplus of high-valuation consumers, but can sell to consumers who do not value the good.

Sprache
Englisch

Erschienen in
Series: Discussion Paper Series ; No. 625

Klassifikation
Wirtschaft
Criteria for Decision-Making under Risk and Uncertainty
Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
Thema
Imitation
heterogeneous populations
bounded rationality
Fubini extension

Ereignis
Geistige Schöpfung
(wer)
Hedlund, Jonas
Oyarzun, Carlos
Ereignis
Veröffentlichung
(wer)
University of Heidelberg, Department of Economics
(wo)
Heidelberg
(wann)
2016

DOI
doi:10.11588/heidok.00022241
Handle
URN
urn:nbn:de:bsz:16-heidok-222416
Letzte Aktualisierung
20.09.2024, 08:22 MESZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Hedlund, Jonas
  • Oyarzun, Carlos
  • University of Heidelberg, Department of Economics

Entstanden

  • 2016

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