Information Cascades and Social Learning
108 Pages Posted: 24 May 2021 Last revised: 8 Feb 2024
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Information Cascades and Social Learning
Information Cascades and Social Learning
Date Written: October 29, 2023
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.
Keywords: Information Cascades, Social Learning, Herding, Fads, Fashion, Conformity, Culture
JEL Classification: D8, D7, D9
Suggested Citation: Suggested Citation