Monotone imitation
type: Item
instance of: scholarly article
title: Monotone imitation
zbMATH Open document ID: 1182.91068
author: Carlos Oyarzun
author: Johannes Ruf
published in: Economic Theory
publication date: 2009-10-23T00:00:00Z
review text: The authors derive the precise characteristics that a social learning process has to satisfy in order to lead the population to choose the actions which fully informed rational agents would choose. Consistency of decisions with the order defined by first-order stochastic dominance may be regarded as one of the most elemental characteristics of rational choice. The results reveal that very simple and rather natural behavioral rules may display this property. In this sense the results implied by the characterization of first-order monotone (FOM) rules suggest that rules could be characterized in terms of the dynamics of the fraction of the population who play first-order stochastic dominant actions. The characterization provided by the authors reveals that the set of FOM rules can be obtained in either way. Therefore, the behavioral rules that lead to decision making are consistent with first-order stochastic dominance. It is easy to see that every (non-trivial) improving rule is FOM, because it is based on the notion of first-order stochastic dominance and not on the notion of expected values. The authors provide two characterizations for FOM rules. The first characterization reveals that a necessary condition for first-order monotonicity is that the behavioral rule must be imitative. A behavioral rule is called imitative if each individual plays either the action that she played in the previous period or the action played by the individual she observed. Furthermore, this characterization shows that when the payoff distribution of one action strictly first-order stochastically dominates the payoff distribution of the other, then the expected net-switch to the first-order dominant action is strictly positive. The analysis also reveals that this condition requires the behavioral rule to be impartial. A behavioral rule is called impartial if, when all the distributions of payoffs associated to the different actions are the same, the proportion of individuals who choose …
reviewed by: Fatima T. Adylova
Mathematics Subject Classification ID: 91B14
Mathematics Subject Classification ID: 91B70
Mathematics Subject Classification ID: 91D10
Mathematics Subject Classification ID: 91A26
zbMATH DE Number: 5620104
zbMATH Keywords: imitation
zbMATH Keywords: social learning
zbMATH Keywords: stochastic dominance
zbMATH Keywords: first-order monotonicity
MaRDI profile type: Publication
full work available at URL: s00199-008-0398-9
OpenAlex ID: W3191015591
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DOI: 10.1007/S00199-008-0398-9
description: scientific article; zbMATH DE number 5620104