The Right Choice at the Right Time: a Herding Experiment in Endogenous Time

Daniel Sgroi

Economics Papers from Economics Group, Nuffield College, University of Oxford

Abstract: This paper examines experimental evidence relating to herd behaviour in situations when subjects can learn from each other, and can delay their decision. Subject acted rationally, gaining from observational learning, despite penalties for delay. Cascades were ubiquitous and reverse-cascades occurred in which incorrect decisions made by early decision-makers produced herds on the incorrect choice. The major departure from rationality came when subjects realized they had chosen incorrectly despite following the majority view.

Keywords: LEARNING; HERDING; DELAY; EXPERIMENTS (search for similar items in EconPapers)
JEL-codes: C91 D82 D83 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2000
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Citations: View citations in EconPapers (7)

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Journal Article: The Right Choice at the Right Time: A Herding Experiment in Endogenous Time (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:nuf:econwp:2000-w15

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