Informational cascades in the laboratory : Do they occur for the right reasons ?

@inproceedings{Huck2000InformationalCI,
  title={Informational cascades in the laboratory : Do they occur for the right reasons ?},
  author={E Huck and org Oechssler},
  year={2000}
}
  • E Huck, org Oechssler
  • Published 2000
Recently, the theory of informational cascades has been tested in an experiment by L. Anderson and Ch. Holt (American Economic Review, 87 (1997) 847±862) who report that their data support the theory amazingly well. In this paper we report on an experiment designed to ®nd out whether observed cascades are indeed due to rational Bayesian updating. However, we ®nd little support for rational updating. The simple heuristic ``follow your own signal'' does much better in explaining our data than… CONTINUE READING
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