The Blind Leading the Blind: Social Influence, Fads and Informational Cascades

David Hirshleifer

Ch. 12 of The New Economics of Human Behaviour, 1995

Abstract:

An informational cascade occurs when it is optimal for an individual, having observed the actions of those ahead of him, to hollow the behavior of the
preceding person without regard to his own information. Among the phenomena that can be explained by informational cascades are conformism at specific
times and places, error-prone behavior, and fragility of behaviors.

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