We study how effectively a group of rational agents learns from repeatedly observing each others' actions. We find that , in the long-run, observing discrete actions of others is significantly less informative than observing their private information : only a fraction of the private information is transmitted . We study how this fraction depends on the distribution of private signals. In a largesociety, where everyone's actions are public, this fraction tends to zero, i. e., only a vanishingly small share of the information is aggregated .  We identify groupthink as the cause of this failure of information aggregation : As the number of agents grows, the actions of each individual depend more and more on the past actions of others, thus revealing less private information .
We study how effectively 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 .
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a group of rational agents learns
long-lived rational agents learn
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, in the long-run, observing discrete actions of others is significantly less informative than observing their private information : only a fraction of the private information is transmitted . We study how this fraction depends on the distribution of private signals. In a largesociety, where everyone's actions are public, this fraction tends to zero, i. e., only a vanishingly small share of the information is aggregated
in the long run, information aggregation fails, and the fraction of private information transmitted goes to zero as the number of agents gets large
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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.
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groupthink as the
rational groupthink---in which agents ignore their private signals and choose the same action for long periods of time---as the
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: As the number of agents grows, the actions of each individual depend more and more on the past actions of others, thus revealing less private information