Herding with and without Payoff Externalities - An Internet Experiment

Mathias Drehmann, Jörg Oechssler and Andreas Roider

No 15/2004, Bonn Econ Discussion Papers from University of Bonn, Bonn Graduate School of Economics (BGSE)

Abstract: Most real world situations which are susceptible to herding are also characterized by direct payoff externalities. Yet, the bulk of the theoretical and experimental literature focuses on pure informational externalities. In this paper we study several different forms of payoff externalities that interact with a standard herding model. More than 6000 subjects, including a subsample of 267 consultants from an international consulting firm, participated in an internet experiment. We also replicate and review earlier cascade experiments. Finally, we study reputation effects in the context of herding.

Keywords: information cascades; herding; network effects; experiment; internet (search for similar items in EconPapers)
JEL-codes: C92 D8 (search for similar items in EconPapers)
Date: 2004
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Related works:
Journal Article: Herding with and without payoff externalities -- an internet experiment (2007)
Working Paper: Herding With and Without Payoff Externalities - An Internet Experiment (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bonedp:152004

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