Is playing alone in the darkness sufficient to prevent informational cascades?
Annamaria Fiore () and
Andrea Morone ()
Experimental from University Library of Munich, Germany
Models of herd behaviour and informational cascades were theoretically developed in 1992 respectively by Banerjee (A simple model of herd behavior) and Bikhchandani, Hirshleifer and Welch (A Theory of Fads, Fashion, Custom and Cultural Change as Informational Cascades). Both articles pointed out the existence of an information externality that causes a welfare loss, and both proposed the idea that destroying an amount of information may turn out in a social improvement. Although this is an old idea and in the last years many features of herd behaviour and informational cascades were studied, this particular aspect was never developed or extensively analysed. In this article we will try to investigate this hypothesis both theoretically and experimentally.
Keywords: Informational Cascades; Individual Decision Making; Experiments; Information Externality (search for similar items in EconPapers)
JEL-codes: C92 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp
Note: Type of Document - pdf; pages: 19
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
Working Paper: Is playing alone in the darkness sufficient to prevent informational cascades? (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpex:0503002
Access Statistics for this paper
More papers in Experimental from University Library of Munich, Germany
Bibliographic data for series maintained by EconWPA ().