We consider a differentiated-goods Cournot competition where each agent learns about how much to produce. There are two types of agents: ignorant and informed. Ignorants do not know about the demand function for their products and naively assume prices for their products will remain the same as the previous period in the process of learning. Informed ones, on the other hand, know about the demand function, and learn how much to produce by myopically best responding against the quantities produced by others. We show that there are situations in which ignorants are more successful than informed (in a sense that they obtain a higher payoff than the latter). This occurs because of the way two types of agents learn to behave. Of course, there are situations where the opposite, the informed being richer than the ignorants, is true. The nature of strategic interactions determines which outcome prevails.
['Nobuyuki Hanaki', 'Juliette Rouchier']
If you are so rich, why aren't you smart?