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Herding with collective preferences

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 encompasses applications such as sequential elections, public good contributions, and leadership charitable giving. Copyright Springer-Verlag 2012

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File URL: http://hdl.handle.net/10.1007/s00199-011-0609-7
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Article provided by Springer & Society for the Advancement of Economic Theory (SAET) in its journal Economic Theory.

Volume (Year): 51 (2012)
Issue (Month): 3 (November)
Pages: 601-626

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Handle: RePEc:spr:joecth:v:51:y:2012:i:3:p:601-626
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Web page: http://saet.uiowa.edu/

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Order Information: Web: http://www.springer.com/economics/economic+theory/journal/199/PS2

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  1. Smith, L. & Sorensen, P., 1996. "Pathological Outcomes of Observational Learning," Economics Papers 115, Economics Group, Nuffield College, University of Oxford.
  2. Jacob Goeree & Thomas Palfrey & Brian Rogers, 2006. "Social learning with private and common values," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 28(2), pages 245-264, 06.
  3. Jay Pil Choi, 1997. "Herd Behavior, the 'Penguin Effect,' and the Suppression of Informational Diffusion: An Analysis of Informational Externalities and Payoff Interdependency," RAND Journal of Economics, The RAND Corporation, vol. 28(3), pages 407-425, Autumn.
  4. Timothy Feddersen & Wolfgang Pesendorfer, 1997. "Voting Behavior and Information Aggregation in Elections With Private Information," Levine's Working Paper Archive 1560, David K. Levine.
  5. James Andreoni, 2006. "Leadership Giving in Charitable Fund-Raising," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(1), pages 1-22, 01.
  6. Neeman, Zvika & Orosel, Gerhard O., 1999. "Herding and the Winner's Curse in Markets with Sequential Bids," Journal of Economic Theory, Elsevier, vol. 85(1), pages 91-121, March.
  7. Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 797-817.
  8. repec:pit:wpaper:325 is not listed on IDEAS
  9. John A. List & David Lucking-Reiley, 2000. "The Effects of Seed Money and Refunds on Charitable Giving: Experimental Evidence from a University Capital Campaign," Vanderbilt University Department of Economics Working Papers 0008, Vanderbilt University Department of Economics.
  10. David Kreps & Robert Wilson, 1998. "Sequential Equilibria," Levine's Working Paper Archive 237, David K. Levine.
  11. Brian Knight & Nathan Schiff, 2007. "Momentum and Social Learning in Presidential Primaries," NBER Working Papers 13637, National Bureau of Economic Research, Inc.
  12. Steven Callander, 2007. "Bandwagons and Momentum in Sequential Voting," Review of Economic Studies, Oxford University Press, vol. 74(3), pages 653-684.
  13. 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.
  14. Ronny Razin, 2003. "Signaling and Election Motivations in a Voting Model with Common Values and Responsive Candidates," Econometrica, Econometric Society, vol. 71(4), pages 1083-1119, 07.
  15. Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414.
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