Are more Informed Agents able to shatter Information Cascades in the Lab ?
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An information cascade occurs when agents ignore their own information completely and simply take the same action as predecessor agents have taken. This rational imitation has been empirically revealed by the Anderson and Holt experiment. We replicate this experiment, with different parameter values, and we test the possibility for more informed agents to shatter potential information cascades. Our results corroborate those observed by Anderson and Holt and the theoretical framework on which the experimental design is based.
KeywordsPrivate Information Expected Profit Private Signal Information Cascade Previous Choice
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- Anderson, L. and C. Holt, (1995), Information cascades in the laboratory.Google Scholar