Document Type
Conference Proceeding
Language
eng
Format of Original
11 p.
Publication Date
2005
Publisher
Decision Sciences Institute
Source Publication
Southwest Institute 2005 Program and Proceedings
Abstract
Based on an assumption of one-way learning, Granato and Wong (2004) consider a framework with two groups of agents, Group L and Group H, where Group L is less "attentive" and uses the expectations of the more or highly "attentive" Group H to update their forecasts. The paper shows the "boomerang effect," which is defined as a situation where the inaccurate forecasts of a less attentive group confound a more attentive group's forecasts. This extended paper relaxes the one-way learning assumption and investigates the case that both groups are learning from each other, i.e., dual learning. Simulations suggest that a boomerang effect still exists. Surprisingly, although the highly attentive group has a full set of information to make forecasts, they still learn from Group L. The reason is that Group H adjusts their forecasts because there is available information in Group L's forecast measurement error.
Recommended Citation
Wang, Miao Grace and Wong, M. C. Sunny, "Information Diffusion in a Cobweb World" (2005). Economics Faculty Research and Publications. 129.
https://epublications.marquette.edu/econ_fac/129
Comments
Published version. Published as part of the proceedings of the conference, Southwest Institute 2005 Program and Proceedings, 2005: 258-268. Publisher link. © 2005 Decision Sciences Institute. Used with permission.