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Informational Cascades and Decision to Migrate

  • Epstein, Gil S.

    ()

    (Bar-Ilan University)

We introduce the idea that informational cascades can explain the observed regularity that emigrants from the same locations also tend to choose the same foreign locations. Thus informational cascades generate herd behavior. Herd behavior is compared with the network externalities explanation of the same phenomenon. The relation between social tensions and herd behavior is observed when local populations are xenophobic.

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File URL: http://ftp.iza.org/dp445.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 445.

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Length: 25 pages
Date of creation: Mar 2002
Date of revision:
Publication status: published in: Gil S. Epstein and Ira N. Gang (eds.): Migration and Culture, Emerald Publishing, Bingley, 2010, 25-44
Handle: RePEc:iza:izadps:dp445
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  1. Sibley, Christopher W. & Walsh, Patrick Paul, 2002. "Earnings Inequality and Transition: A Regional Analysis of Poland," IZA Discussion Papers 441, Institute for the Study of Labor (IZA).
  2. Elise Brezis & Paul Krugman, 1996. "Immigration, investment, and real wages," Journal of Population Economics, Springer, vol. 9(1), pages 83-93, February.
  3. Jeffrey Church & Ian King, 1993. "Bilingualism and Network Externalities," Canadian Journal of Economics, Canadian Economics Association, vol. 26(2), pages 337-45, May.
  4. Giuseppe Bertola & Stefan Hochguertel & Winfried Koeniger, 2005. "Dealer Pricing Of Consumer Credit ," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(4), pages 1103-1142, November.
  5. Scharfstein, David S & Stein, Jeremy C, 1990. "Herd Behavior and Investment," American Economic Review, American Economic Association, vol. 80(3), pages 465-79, June.
  6. Chiswick, Barry R & Miller, Paul M, 1996. "Ethnic Networks and Language Proficiency among Immigrants," Journal of Population Economics, Springer, vol. 9(1), pages 19-35, February.
  7. Fertig, Michael & Schmidt, Christoph M., 2002. "The Perception of Foreigners and Jews in Germany - A Structural Analysis of a Large Opinion Survey," IZA Discussion Papers 431, Institute for the Study of Labor (IZA).
  8. Carrington, William J & Detragiache, Enrica & Vishwanath, Tara, 1996. "Migration with Endogenous Moving Costs," American Economic Review, American Economic Association, vol. 86(4), pages 909-30, September.
  9. Joshua D. Angrist & Adriana D. Kugler, 2001. "Protective or counter-productive? Labor market institutions and the effect of immigration on EU natives," Economics Working Papers 587, Department of Economics and Business, Universitat Pompeu Fabra.
  10. Giulio Fella & Paola Manzini & Marco Mariotti, 2004. "Does Divorce Law Matter?," Journal of the European Economic Association, MIT Press, vol. 2(4), pages 607-633, 06.
  11. King, Stephen P., 1995. "Search with free-riders," Journal of Economic Behavior & Organization, Elsevier, vol. 26(2), pages 253-271, March.
  12. Epstein, Gil S. & Ward-Warmedinger, Melanie E., 2002. "Perceived Income, Promotion and Incentive Effects," IZA Discussion Papers 435, Institute for the Study of Labor (IZA).
  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. Banerjee, Abhijit V, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, MIT Press, vol. 107(3), pages 797-817, August.
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