When are dynamic choices consistent with learning from common information?

Economics and Sciences Decision Department

Speaker : Ludovic Renou

from: Queen Mary Unversity of London

Videoconference

Abstract :

A researcher observes a sequence of choices made by multiple agents in a binary-state, binary-action environment. Agents differ in terms of their initial prior beliefs about the unknown state, their preferences or both, but update beliefs based on common information in each time period. The state evolves according to a commonly known stochastic process and we separately examine the cases where the state is time-invariant and time-varying. We characterize the set of choices that are consistent with some preferences, priors, common information and stochastic process for the state. We apply our results to committee voting where they imply that the heterogeneity of voters in their bias versus their ideology can lead to very different sets of voting patterns.