| In the first chapter, which is joint work with Michael Rapp, I present a model in which agents are uncertain about their positions in a technology adoption sequence. They sample the decisions of past individuals and receive a private signal about the state of the world. Sampling rules are stationary. I provide a flexible framework to analyze learning under position uncertainty. Under stationary sampling, learning is complete if the private signal strength is unbounded. If signal strength is bounded, agents achieve second-best learning: all individuals do as well as the most informed agents would do in isolation.;The second chapter presents a model in which homogeneous rational agents choose between two competing technologies. Agents observe a private signal and a sample of other agents' previous choices. The signal has both an idiosyncratic and an aggregate component of uncertainty. I derive the optimal decision rule when each agent observes the decision of exactly two agents. Due to aggregate uncertainty, aggregate behavior does not necessarily reflect the true state of nature. Bad choices can be perpetuated in this environment: I show that aggregate uncertainty can lead to agents herding on the inferior technology with positive probability. I also present examples in which herding occurs for arbitrarily large sample sizes.;In the third chapter, which is joint work with Michael Rapp, I present a model in which agents must choose between two competing technologies. Payoffs depend both on an uncertain state of the world and on the proportion of agents choosing each technology. A useful example is that of an anti-coordination game: farmers are choosing to plant either corn or soybeans at the start of the season but are uncertain about what the relative demand will be at the end of the season. Farmers sample the decisions of other individuals and receive a private signal about the state of the world. Observational learning helps attain coordination since farmers can benefit from others' information. If signals are of unbounded strength, the proportion of crops planted correctly anticipates demand. |
