Correlated Information Cascades

43 Pages Posted: 2 Nov 2021

See all articles by Jiemai Wu

Jiemai Wu

The University of Sydney - School of Economics

Date Written: October 28, 2021

Abstract

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

Wu, Jiemai, Correlated Information Cascades (October 28, 2021). Available at SSRN: https://ssrn.com/abstract=3951879 or http://dx.doi.org/10.2139/ssrn.3951879

Jiemai Wu (Contact Author)

The University of Sydney - School of Economics ( email )

Social Sciences Building
Room 510
Sydney, NSW 2006
Australia

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