### Abstract

In this paper, we consider a model of social learning in a population of myopic, memoryless agents. The agents are placed at integer points on an infinite line. Each time period, they perform experiments with one of two technologies, then each observes the outcomes and technology choices of the two adjacent agents as well as his own outcome. Two learning rules are considered; it is shown that under the first, where an agent changes his technology only if he has had a failure (a bad outcome), the society converges with probability 1 to the better technology. In the other, where agents switch on the basis of the neighbourhood averages, convergence occurs if the better technology is sufficiently better. The results provide a surprisingly optimistic conclusion about the diffusion of the better technology through imitation, even under the assumption of extremely boundedly rational agents.

Original language | English (US) |
---|---|

Pages (from-to) | 355-376 |

Number of pages | 22 |

Journal | Advances in Applied Probability |

Volume | 36 |

Issue number | 2 |

DOIs | |

State | Published - Jun 1 2004 |

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### All Science Journal Classification (ASJC) codes

- Statistics and Probability
- Applied Mathematics

### Cite this

*Advances in Applied Probability*,

*36*(2), 355-376. https://doi.org/10.1239/aap/1086957576

}

*Advances in Applied Probability*, vol. 36, no. 2, pp. 355-376. https://doi.org/10.1239/aap/1086957576

**Technology diffusion by learning from neighbours.** / Chatterjee, Kalyan; Xu, Susan H.

Research output: Contribution to journal › Article

TY - JOUR

T1 - Technology diffusion by learning from neighbours

AU - Chatterjee, Kalyan

AU - Xu, Susan H.

PY - 2004/6/1

Y1 - 2004/6/1

N2 - In this paper, we consider a model of social learning in a population of myopic, memoryless agents. The agents are placed at integer points on an infinite line. Each time period, they perform experiments with one of two technologies, then each observes the outcomes and technology choices of the two adjacent agents as well as his own outcome. Two learning rules are considered; it is shown that under the first, where an agent changes his technology only if he has had a failure (a bad outcome), the society converges with probability 1 to the better technology. In the other, where agents switch on the basis of the neighbourhood averages, convergence occurs if the better technology is sufficiently better. The results provide a surprisingly optimistic conclusion about the diffusion of the better technology through imitation, even under the assumption of extremely boundedly rational agents.

AB - In this paper, we consider a model of social learning in a population of myopic, memoryless agents. The agents are placed at integer points on an infinite line. Each time period, they perform experiments with one of two technologies, then each observes the outcomes and technology choices of the two adjacent agents as well as his own outcome. Two learning rules are considered; it is shown that under the first, where an agent changes his technology only if he has had a failure (a bad outcome), the society converges with probability 1 to the better technology. In the other, where agents switch on the basis of the neighbourhood averages, convergence occurs if the better technology is sufficiently better. The results provide a surprisingly optimistic conclusion about the diffusion of the better technology through imitation, even under the assumption of extremely boundedly rational agents.

UR - http://www.scopus.com/inward/record.url?scp=3142730015&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=3142730015&partnerID=8YFLogxK

U2 - 10.1239/aap/1086957576

DO - 10.1239/aap/1086957576

M3 - Article

AN - SCOPUS:3142730015

VL - 36

SP - 355

EP - 376

JO - Advances in Applied Probability

JF - Advances in Applied Probability

SN - 0001-8678

IS - 2

ER -