On the absorbability of herd behaviour and informational cascades: an experimental analysis
AbstractA theory is said to be fully absorbable whenever its own acceptance by all of the individuals belonging to a certain population does not question its predictive validity. This accounts for strategic equilibria and can be related to the logic underlying convergence of behaviour and intentional herding in sequential games. This paper discusses the absorbability of informational cascades' theory by bounded rational decision-makers and analyses whether providing individuals with theoretic information on informational cascades affects overall probability of herding phenomena to occur as well as whether an incorrect cascade can be reversed because of bounded rational adapting of the theory's prescriptive. --
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Bibliographic InfoPaper provided by Dresden University of Technology, Faculty of Business and Economics, Department of Economics in its series Dresden Discussion Paper Series in Economics with number 15/07.
Date of creation: 2007
Date of revision:
Theory absorption; Herd behaviour; Informational cascades;
Other versions of this item:
- Morone, Andrea & Fiore, Annamaria & Sandri, Serena, 2008. "On The Absorbability Of Herd Behaviour And Informational Cascades: An Experimental Analysis," MPRA Paper 6884, University Library of Munich, Germany.
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
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