Information Cascades and Social Learning

Sushil Bikhchandani, David Hirshleifer, Omer Tamuz and Ivo Welch

No 28887, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Social learning is the updating of beliefs based on the observation of others. It 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 thirty years. We also highlight open questions and promising directions for further theoretical and empirical exploration.

JEL-codes: D7 D8 D9 (search for similar items in EconPapers)
Date: 2021-06
Note: AP CF DEV EH IO LE LS PE POL PR
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Citations: View citations in EconPapers (7)

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Related works:
Journal Article: Information Cascades and Social Learning (2024)
Working Paper: Information Cascades and Social Learning (2021)
Working Paper: Information Cascades and Social Learning (2021)
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