Information Aggregation with Random Ordering: Cascades and Overconfidence

Markus Noeth and Martin Weber
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Markus Noeth: University of Mannheim

No 1592, Econometric Society World Congress 2000 Contributed Papers from Econometric Society

Abstract: In economic models, it is usually assumed that agents aggregate their private and all available public information correctly and completely. In this experiment, we identify subjects' updating procedures and analyze the consequences for the aggregation process. Decisions can be based on private information with known quality and observed decisions of other participants. In this setting with random ordering, information cascades are observable and agents' overconfidence has a positive effect on avoiding a non-revealing aggregation process but it reduces welfare in general.

Date: 2000-08-01
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Related works:
Journal Article: Information Aggregation with Random Ordering: Cascades and Overconfidence (2003)
Working Paper: Information aggregation with random ordering: cascades and overconficence (2000)
Working Paper: Information Aggregation with Random Ordering: Cascades and Overconfidence (2000)
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