The Blind Leading the Blind: Social Influence, Fads and Informational Cascades
THE NEW ECONOMICS OF HUMAN BEHAVIOUR, Ierulli, K. and Tommasi, M., eds., Ch.12, pp. 188-215, Cambridge University Press, 1995
Anderson Graduate School of Management, UCLA, Working Paper No. 24-93
35 Pages Posted: 5 Oct 2008 Last revised: 29 Sep 2009
An informational cascade occurs when it is optimal for an individual, having observed the actions of those ahead of him, to hollow the behavior of the preceding person without regard to his own information. Among the phenomena that can be explained by informational cascades are conformism at specific times and places, error-prone behavior, and fragility of behaviors.
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