Observational learning
Subtitle: evidence from a randomized natural field experiment
By: Hongbin Cai, Yuyu Chen, Hanming Fang.
Contributors: Chen, Yuyu.; Fang, Hanming.; National Bureau of Economic Research.
Series: NBER working paper series -- no. 13516.; Working paper series (National Bureau of Economic Research) -- working paper no. 13516.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, Mass
Language: eng
Number of pages: 20
Subjects: Menus -- Economic aspects; Observation (Psychology); Decision making -- Econometric models
Description: We present results about the effects of observing others' choices, called observational learning, on individuals' behavior and subjective well-being in the context of restaurant dining from a randomized natural field experiment. Our experimental design aims to distinguish observational learning effect from saliency effect (because observing others' choices also makes these choices more salient). We find that, depending on specifications, the demand for the top 5 dishes was increased by an average of about 13 to 18 percent when these popularity rankings were revealed to the customers; in contrast, being merely mentioned as some sample dishes did not significantly boost their demand. Moreover, we find that, consistent with theoretical predictions, some modest evidence that observational learning effect was stronger among infrequent customers. We also find that customers' subjective dining experiences were improved when presented with the information about the top choices by other consumers, but not when presented with the names of some sample dishes.
Notes: "October 2007"

Includes bibliographical references (p. 18-20).

Also available in PDF from the NBER World Wide Web site (www.nber.org).