Signal Qualities, Order of Decisions, and Informational Cascades: Experimental Evidence
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.
Volume (Year): 3 (2005)
Issue (Month): 34 ()
|Contact details of provider:|| |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Steffen Huck & Joerg Oechssler, 1999.
"Informational cascades in the laboratory: Do they occur for the right reasons?,"
- Huck, Steffen & Oechssler, Jorg, 2000. "Informational cascades in the laboratory: Do they occur for the right reasons?," Journal of Economic Psychology, Elsevier, vol. 21(6), pages 661-671, December.
- Bogaçhan Çelen & Shachar Kariv, 2004. "Distinguishing Informational Cascades from Herd Behavior in the Laboratory," American Economic Review, American Economic Association, vol. 94(3), pages 484-498, June.
- Ottaviani, Marco & Sorensen, Peter, 2001. "Information aggregation in debate: who should speak first?," Journal of Public Economics, Elsevier, vol. 81(3), pages 393-421, September.
- Anderson, Lisa R & Holt, Charles A, 1997. "Information Cascades in the Laboratory," American Economic Review, American Economic Association, vol. 87(5), pages 847-62, December.
- Sushil Bikhchandani & David Hirshleifer & Ivo Welch, 2010.
"A theory of Fads, Fashion, Custom and cultural change as informational Cascades,"
Levine's Working Paper Archive
1193, David K. Levine.
- Bikhchandani, Sushil & Hirshleifer, David & Welch, Ivo, 1992. "A Theory of Fads, Fashion, Custom, and Cultural Change in Informational Cascades," Journal of Political Economy, University of Chicago Press, vol. 100(5), pages 992-1026, October.
When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-05c90006. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (John P. Conley)
If references are entirely missing, you can add them using this form.