| Abstract: |
The recent nonexperimental literature on social learning focuses on showing
that observational learning exists, that is, individuals do indeed draw
inferences by observing the actions of others. We take this literature a step
further by analyzing whether individuals are Bayesian social learners. We use
data from the Associated Press (AP) U.S. College Football Poll, a weekly
subjective ranking of the top twenty-five teams. The voters' aggregate
rankings are available each week prior to when voters have to update their
individual rankings, so voters can potentially learn from their peers. We find
that peer rankings: 1) are informative, as conditioning on them improves the
accuracy of our estimated Bayesian posterior rankings in a nontrivial way, and
2) influence the way voters adjust their rankings, but the influence is less
than the Bayesian amount. Voters' revisions are closer to Bayesian when the
ranked team loses as compared to when it wins, which we attribute to losses
being less ambiguous and more salient signals. We find evidence of significant
voter heterogeneity, and that voters are less responsive to peer rankings
after they have been on the poll a few years. We interpret the data to imply
that reputation motives cause voters to "conform," but not enough to overcome
the overall tendency to underreact to social information, that is, to be
"stubborn." |