Information Cascades and Social Learning

Sushil Bikhchandani, David Hirshleifer, Omer Tamuz and Ivo Welch

Journal of Economic Literature, 2024, vol. 62, issue 3, 1040-93

Abstract: Social learning is the updating of beliefs based on observation of others. Such observation can lead to efficient aggregation of information, but also to inaccurate decisions, fragility of mass behaviors, and, in the case of information cascades, to complete blockage of learning. We review the theory of information cascades and social learning and discuss important themes, insights, and applications of this literature as it has developed over the last 30 years. We also highlight open questions and promising directions for further theoretical and empirical exploration.

JEL-codes: D71 D82 D83 D91 Z13 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Information Cascades and Social Learning (2021)
Working Paper: Information Cascades and Social Learning (2021)
Working Paper: Information Cascades and Social Learning (2021)
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DOI: 10.1257/jel.20241472

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