We study how long-lived rational agents learn from repeatedly observing  each others' actions. We find that in the long run, information aggregation fails, and the fraction of private information transmitted goes to zero as the number of agents gets large. With Normal signals, in the long-run, agents learn less from observing the actions of any number of other agents than they learn from seeing three other agents ' signals . We identify rational groupthink---in which agents ignore their private signals and choose the same action for long periods of time---as the cause of this failure of information aggregation.
We study how long-lived rational agents learn from repeatedly observing a private signal and each others' actions. With normal signals, a group of any size learns more slowly than just four agents who directly observe each others' private signals in each period. Similar results apply to general signal structures . We identify rational groupthink---in which agents ignore their private signals and choose the same action for long periods of time---as the cause of this failure of information aggregation.
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a private signal and
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We find that in the long run, information aggregation fails, and the fraction of private information transmitted goes to zero as the number of agents gets large. With Normal signals, in the long-run, agents learn less from observing the actions of any number of other agents than they learn from seeing three other agents ' signals
With normal signals, a group of any size learns more slowly than just four agents who directly observe each others' private signals in each period. Similar results apply to general signal structures