A comparison of endogenous and exogenous timing in a social learning experiment

Abstract

We experimentally investigate social learning in a two-agent prediction game with both exogenous and endogenous ordering of decisions on a continuous action space. We are first in comparing exogenous and endogenous ordering within one framework, which enables a direct comparison of both structures in terms of informational efficiency, strategic delay and welfare. More efficient observational learning leads to more accurate predictions in the endogenous setting and increases informational efficiency compared to an exogenous setting. However, strategic delay induces waiting costs that offset these benefits and lead to a parity of exogenous and endogenous ordering in terms of welfare results. Our results hold relevance for the efficient design of decision regimes in contexts characterized by continuous action spaces.