Informational cascades in the laboratory: Do they occur for the right reasons?
Journal of Economic PsychologyPublished 1 December 2000
Steffen Huck, Jörg Oechssler
Citations10
SJR quartileQ1
SJR score1.33
SNIP1.13
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Abstract
Recently, the theory of informational cascades has been tested in an experiment by Anderson and Holt (1997) who report that their data support the theory amazingly well. In this note we report on an experiment designed to find out whether observed cascades are indeed due to rational Bayesian updating. However, we find little support for rational updating. The simple heuristic "follow your own signal" does much better in explaining our data than Bayesian rationality.
Keywords
Economics, Econometrics and FinancePhysics and Astronomy
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