Differences of Opinion

This paper considers the resolution of ambiguity according to the scientific ideal of direct observation when there is a practical necessity for social learning. An agent faces ambiguity when she directly observes low-quality data yielding set-identified signals. I suppose the agent’s objective is to choose the single belief replicating what would occur with high-quality data yielding pointidentified signals. I allow the agent to solve this missing data problem using signals observed through her network in combination with a model of social learning. In some cases the agent’s belief formation reduces to DeGroot updating and beliefs in a network reach a consensus. In other cases the agent’s updating can generate polarization and sustain clustered disagreement, even on a connected network where everyone observes the same data and processes that data with the same model.