The Timing of Social Learning

We consider a pure informational externalities environment in which agents make binary decisions. The agents are asymmetrically informed about a payoff-relevant state variable, and choose the timing of their decisions strategically. There is a delay cost that must be balanced against the possibility of learning from the announcements of predecessors. For two player games in discrete time, we show that in the unique equilibrium the game ends in finite time and the agent with better information decides earlier. As the time intervals become vanishingly short, all announcements occur immediately, no delay costs are incurred, and the equilibrium outcome approaches the first best. We show that for games with many players and short time intervals, the true state is revealed immediately and thus an e