Do individuals recognize cascade behavior of others?: an experimental study

Arbeitspapier

In an information cascade experiment participants are confronted with artificial predecessors predicting in line with the BHW model (Bikchandani et al. 1992). Using the BDM (Becker et al., 1964) mechanism we study participants' probability perceptions based on maximum prices for participating in the prediction game. We find increasing maximum prices the more coinciding predictions of predecessors are observed, regardless of whether additional information is revealed by these predictions. Individual price patterns of more than two thirds of the participants indicate that cascade behavior of predecessors is not recognized.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SFB 649 Discussion Paper ; No. 2006,079

Classification and Topics

• Classification: Wirtschaft ; Design of Experiments: Laboratory, Individual ; Criteria for Decision-Making under Risk and Uncertainty ; Asymmetric and Private Information; Mechanism Design
• Subject: information cascade ; Bayes' Rule ; decision under risk and uncertainty ; experimental economics ; Informationsökonomik ; Spieltheorie ; Test ; Entscheidung ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Grebe, Tim ; Schmid, Julia ; Stiehler, Andreas
• Event: Veröffentlichung
• (who): Humboldt University of Berlin, Collaborative Research Center 649 - Economic Risk
• (where): Berlin
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/25162
• Last update: 10.03.2025, 11:45 AM CET