This week's Theory Seminar will feature a talk by Julia Salmi on her paper (w/ Tuomas Laiho and Pauli Murto), Gradual Learning from Incremental Actions.

In addition to the main talk, there will be a panel including Franseco Dilme and Yingni Guo

Link to the full paper

Abstract:

We introduce a collective experimentation problem where small agents choose the timing of an irreversible action under uncertainty and public feedback from their actions arrives gradually over time. We solve the de- centralized equilibrium where agents maximize their own payoffs and the socially optimal policy, which internalizes the social value of information. The latter entails an informational tradeoff where acting today speeds up learning but postponing capitalizes on the option value of waiting. We show how different experimentation patterns – including the socially optimal policy – can be implemented as a decentralized equilibrium by using dynamic posted price mechanisms. Extending our analysis to revenue maximizing mechanisms, we study the monopoly pricing of a new durable good under gradual learning from user experience.