Economics at your fingertips  

In a Herd? Herding with costly observation and an unknown number of predecessors

Mats Godenhielm () and Klaus Kultti ()

Finnish Economic Papers, 2008, vol. 21, issue 2, 95-103

Abstract: We consider a sequential decision to adopt/not adopt a technology in a herding environment with costly observation. The novelty compared to the previous models on herding with costly observation, such as Kultti and Miettinen (2006a), is that the agents do not know how many other agents have been in the same situation earlier. It turns out that herding no longer arises deterministically. We show that when observation costs are low there exists a unique symmetric pure strategy equilibrium where all agents observe the actions of two immediate predecessors in order to find out whether they are in a herd or not.

JEL-codes: D82 D83 (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) ... 22008_godenhielm.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

More articles in Finnish Economic Papers from Finnish Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Editorial Secretary ( this e-mail address is bad, please contact ).

Page updated 2023-03-26
Handle: RePEc:fep:journl:v:21:y:2008:i:2:p:95-103