Wise Crowds Or Wise Minorities?
Source: University of Zurich
This paper reports results from social learning experiments where subjects choose between two options and each subject has a small chance of being perfectly informed about which option is correct. In treatment "Sequence," subjects observe the entire sequence of predecessors' choices while in treatment "No-sequence" they only observe the number of times each option has been chosen. The theoretical predictions are that subjects follow their immediate predecessors in treatment sequence and follow the minority in treatment no-sequence (Callander and HÄorner, 2009). The former prediction is borne out in the data, but subjects tend to follow the majority in treatment no-sequence.