TY  - JOUR
AU  - Cai,Hongbin
AU  - Chen,Yuyu
AU  - Fang,Hanming
TI  - Observational Learning: Evidence from a Randomized Natural Field Experiment
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13516
PY  - 2007
Y2  - October 2007
UR  - http://www.nber.org/papers/w13516
L1  - http://www.nber.org/papers/w13516.pdf
N1  - Author contact info:
Hongbin Cai
Guanghua School of Management and IEPR
Peking University
Beijing 100871
China
E-Mail: hbcai@gsm.pku.edu.cn

Yuyu Chen
Applied Economics Department
Guanghua School of Management
Peking University
Beijing, 100871 
E-Mail: Chenyuyu@gsm.pku.edu.cn

Hanming Fang
Department of Economics
University of Pennsylvania
3718 Locust Walk
Philadelphia, PA 19104
Tel: 215-898-7767
Fax: 215-573-2057
E-Mail: hanming.fang@econ.upenn.edu
AB  - 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.
ER  -