Learning and Herding - An Account of Hwang Woo-Suk Scandal

Learning and Herding - An Account of Hwang Woo-Suk Scandal

A model of observational learning is constructed to explain the evolution of social opinion. In contrast to existing models, the model allows for uninformed agents who nevertheless make rational choices in view of their individual preferences. We apply the model to explain the time path of the accumulation of research funds in the case of the recent scandal involving a biomedical scientist, Hwang Woo-Suk. Empirical tests indicate that the evolution of social opinion represented by the research fund committed to the support of Hwang was induced by a low information arrival rate combined with private information of high precision when the agent is informed.