Naïve Learning in Social Networks and the Wisdom of Crowds

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Naïve Learning in Social Networks and the Wisdom of Crowds (2010)

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by Benjamin Golub , Matthew O. Jackson

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98 - 1 self

BibTeX

@MISC{Golub10naïvelearning,
    author = {Benjamin Golub and Matthew O. Jackson},
    title = {Naïve Learning in Social Networks and the Wisdom of Crowds },
    year = {2010}
}

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Abstract

We study learning in a setting where agents receive independent noisy signals about the true value of a variable and then communicate in a network. They naïvely update beliefs by repeatedly taking weighted averages of neighbors’ opinions. We show that all opinions in a large society converge to the truth if and only if the influence of the most influential agent vanishes as the society grows. We also identify obstructions to this, including prominent groups, and provide structural conditions on the network ensuring efficient learning. Whether agents converge to the truth is unrelated to how quickly consensus is approached. (JEL D83, D85, Z13)

Keyphrases

social network na ve learning independent noisy signal jel d83 prominent group weighted average structural condition influential agent vanishes true value large society converge neighbor opinion update belief

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