This paper studies a simple model of observational learning where agents care not only about the information of others but also about their actions. We show that despite complex strategic considerations that arise from forward-looking incentives, herd behavior can arise in equilibrium. The model...

In one-shot investment game experiments where each player's payoff is a convex combination of own and other's profit, trust remains unaffected by the extent of interdependence whereas trustworthiness reacts positively to it.