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UCL Department of Economics

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Theory seminar presented by Aislinn Bohren (CMU)

12 May 2020, 4:30 pm–5:45 pm

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"Misinterpreting Social Outcomes and Information Campaigns"

Event Information

Open to

All

Organiser

Nikita Roketskiy

Location

LG10
056: Bentham House
4-8 Endsleigh Gardens
London
WC1H 0EG
United Kingdom

Abstract :This paper explores learning in a setting with social perception biases. Individuals learn from others’ outcomes but have a misspecified model of their preferences. When individuals systematically overestimate the similarity between their own preferences and the preferences of others -- exhibiting the false consensus effect -- this can lead to incorrect learning, while when individuals systematically underestimate this similarity -- exhibiting pluralistic ignorance -- this can prevent beliefs from converging. We explore how information campaigns — releasing (costly) information about the state — can counteract these inefficient choices. We show that the duration -- temporary or permanent -- and the target -- correct inefficient action choices or reinforce efficient action choices -- of the optimal information campaign depend crucially on the form of misspecification. 

About the Speaker

Aislinn Bohren

at CMU