Correlated Information Cascades
43 Pages Posted: 2 Nov 2021
Date Written: October 28, 2021
This paper extends the model of information cascade (Bikhchandani, Hirshleifer, and Welch, 1992) by introducing two correlated queues of players. By comparing the equilibrium outcomes of the two-queue game with the benchmark one-queue game, this paper finds out that the observability of correlated players decreases the probability of correct permanent cascades.
Keywords: Informational cascades, imperfectly correlated players, multiple queues
JEL Classification: C72, D83
Suggested Citation: Suggested Citation