Informational cascades: A mirage?
Experimental research found contradictory results regarding the occurrence of informational cascades. Whereas Anderson and Holt [Anderson, L.R., Holt, C.A., 1997. Information cascades in the laboratory. The American Economic Review 87, 847-862] confirmed the model of Banerjee [Banerjee, A.V., 1992. A simple model of herd behavior. The Quarterly Journal of Economics 107, 797-817], and Bikhchandani et al. [Bikhchandani, S., Hishleifer, D., Welch, I., 1992. A theory of fads, fashion, custom, and cultural change as informational cascades. Journal of Political Economy 100, 992-1026] through lab tests, Huck and Oechssler [Huck, S., Oechssler, J., 2000. Informational cascades in the laboratory: do they occur for the right reasons? Journal of Economic Psychology 21, 661-671] came to contradictory results on crucial issues. This article presents experimental evidence supporting further doubts concerning "Bayesian" informational cascades: just under two thirds of all decisions are characterized by an excessive orientation towards the private signal, and only a small number of the subjects (
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.:
- Angela A. Hung & Charles R. Plott, 2001.
"Information Cascades: Replication and an Extension to Majority Rule and Conformity-Rewarding Institutions,"
American Economic Review,
American Economic Association, vol. 91(5), pages 1508-1520, December.
- Plott, Charles & Hung, Angela, 1998. "Information Cascades: Replication and an Extension to Majority Rule and Conformity Rewarding Institutions," Working Papers 1051, California Institute of Technology, Division of the Humanities and Social Sciences.
- Sgroi, D., 2000.
"The Right Choice at the Right Time: a Herding Experiment in Endogenous Time,"
2000-w15, Economics Group, Nuffield College, University of Oxford.
- Daniel Sgroi, 2003. "The Right Choice at the Right Time: A Herding Experiment in Endogenous Time," Experimental Economics, Springer;Economic Science Association, vol. 6(2), pages 159-180, October.
- Goeree, Jacob K. & Holt, Charles A., 2004.
"A model of noisy introspection,"
Games and Economic Behavior,
Elsevier, vol. 46(2), pages 365-382, February.
- 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.
- Anderson, Lisa R & Holt, Charles A, 1997. "Information Cascades in the Laboratory," American Economic Review, American Economic Association, vol. 87(5), pages 847-862, December.
- Steffen Huck & Hans-Theo Normann & Joerg Oechssler, 2004. "Through Trial and Error to Collusion," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(1), pages 205-224, 02.
- Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 797-817.
- 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.
- Steffen Huck & Joerg Oechssler, 1999. "Informational cascades in the laboratory: Do they occur for the right reasons?," Experimental 9901001, EconWPA.
- Selten, Reinhard & Abbink, Klaus & Buchta, Joachim & Sadrieh, Abdolkarim, 2003.
"How to play (3 x 3)-games.: A strategy method experiment,"
Games and Economic Behavior,
Elsevier, vol. 45(1), pages 19-37, October.
- Selten, R. & Abbink, K. & Buchta, J. & Sadrieh, A., 2002. "How to Play 3x3 Games : A Strategy Method Experiment," Discussion Paper 2002-39, Tilburg University, Center for Economic Research.
- Reinhard Selten & Klaus Abbink & Joachim Buchta & Abdolkarim Sadrieh, 2000. "How to Play 3x3-Games A Strategy Method Experiment," Bonn Econ Discussion Papers bgse3_2001, University of Bonn, Germany.
- 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.
- Charles A. Holt & Jacob K. Goeree, 1999. "Stochastic Game Theory: For Playing Games, Not Just for Doing Theory," Virginia Economics Online Papers 306, University of Virginia, Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:eee:jeborg:v:67:y:2008:i:1:p:193-199. 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: (Dana Niculescu)
If references are entirely missing, you can add them using this form.