Shunichiro Sasaki () (Institute of Social and Economic Research, Osaka University)
Abstract
This experimental study investigates the effect of signal strength on the formation of informational cascades by introducing heterogeneous signal qualities associated with the fixed order of decisions on the two different decision-making systems, anti-seniority and seniority. Major findings include that complete cascades occur more frequently in seniority than in anti-seniority, that seniority is more efficient than anti-seniority, but increases the risk of creating negative cascades, and that private signals can be extracted more effectively in anti-seniority than in seniority. For both treatments, rational complete cascades occur less frequently than those suggested by the Bayesian model. For the heuristic subjects employed, the anchoring effect of private signals is partially identified.
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Publisher Info
Article provided by Economics Bulletin in its journal Economics Bulletin.
Find related papers by JEL classification: C9 - Mathematical and Quantitative Methods - - Design of Experiments D8 - Microeconomics - - Information, Knowledge, and Uncertainty
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