The University of Southampton
University of Southampton Institutional Repository

Social learning with local interactions

Record type: Monograph (Discussion Paper)

We study a simple dynamic model of social learning with local informational externalities. There is a large population of agents, who repeatedly have to choose one, out of two, reversible actions, each of which is optimal in one, out of two, unknown states of the world. Each agent chooses rationally, on the basis of private information (s)he receives by a symmetric binary signal on the state, as well as the observation of the action chosen among their nearest neighbours. Actions can be updated at revision opportunities that agents receive in a random sequential order. Strategies are stationary, in that they do not depend on time, nor on location.

We show that:

if agents receive equally informative signals, and observe both neighbours, then the social learning process is not adequate and the process of actions converges exponentially fast to a configuration where some agents are permanently wrong;

if agents are unequally informed, in that their signal is either fully informative or fully uninformative (both with positive probability), and observe one neighbour, then the social learning process is adequate and everybody will eventually choose the action that is correct given the state. Convergence, however, obtains very slowly, namely at rate √t

We relate the findings with the literature on social learning and discuss the property of efficiency of the information transmission mechanism under local interaction.

PDF 1011_with_cover.pdf - Other
Download (272kB)


Guarino, Antonio and Ianni, Antonella (2010) Social learning with local interactions University of Southampton (Discussion Papers in Economics and Econometrics, 1011).

More information

Published date: 11 June 2010
Keywords: social learning, bayesian learning, local informational external-ities, path dependence, consensus, clustering, convergence Rates


Local EPrints ID: 161633
ISSN: 0966-4246
PURE UUID: 33ac87be-80c3-4067-bda3-0bb3740d275d

Catalogue record

Date deposited: 03 Aug 2010 09:09
Last modified: 18 Jul 2017 12:33

Export record


Author: Antonio Guarino
Author: Antonella Ianni

University divisions

Download statistics

Downloads from ePrints over the past year. Other digital versions may also be available to download e.g. from the publisher's website.

View more statistics

Atom RSS 1.0 RSS 2.0

Contact ePrints Soton:

ePrints Soton supports OAI 2.0 with a base URL of

This repository has been built using EPrints software, developed at the University of Southampton, but available to everyone to use.

We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we will assume that you are happy to receive cookies on the University of Southampton website.