Learning about informativeness

Abstract: We study a sequential social learning model in which there is uncertainty about the informativeness of a common signal-generating process. Rational agents arrive in order and make decisions based on the past actions of others and their private signals. We show that, in this setting, asymptotic learning about informativeness is not guaranteed and depends crucially on the relative tail distributions of the private beliefs induced by uninformative and informative signals. We identify the phenomenon of perpetual disagreement as the cause of learning and characterize learning in the canonical Gaussian environment.