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A theory of Fads, Fashion, Custom and cultural change as informational Cascades

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  • Sushil Bikhchandani
  • David Hirshleifer
  • Ivo Welch

Abstract

An informational cascade occurs when it is optimal for an individual, having observed the actions of those ahead of him, to follow the behavior of the preceding individual with regard to his own information. The authors argue that localized conformity of behavior and the fragility of mass behaviors can be explained by informational cascades. Copyright 1992 by University of Chicago Press.
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  • 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.
  • Handle: RePEc:cla:levarc:1193
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    References listed on IDEAS

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