A Simple Note on Informational Cascades

Arbeitspapier

Seminal models of herd behaviour and informational cascades point out existence of negative information externalities, and propose to ?destroy? information in order to achieve social improvements. Although in the last years many features of herd behaviour and informational cascades have been studied, this particular aspect has never been extensively analysed. In this article we try to fill this gap, investigating both theoretically and experimentally whether and to which extent destroying information can improve welfare. Our empirical results show that this decisional mechanism actually leads to a behaviour more consistent with the theory that in turn produces the predicted efficiency gain.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Economics Discussion Papers ; No. 2007-21

Classification and Topics

• Classification: Wirtschaft ; Design of Experiments: Laboratory, Individual ; Externalities
• Subject: Informational cascades ; information externality ; individual decision making ; experiment

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Fiore, Annamaria ; Morone, Andrea
• Event: Veröffentlichung
• (who): Kiel Institute for the World Economy (IfW)
• (where): Kiel
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/17944
• Last update: 10.03.2025, 11:42 AM CET