Article ID Journal Published Year Pages File Type
7243171 Journal of Economic Behavior & Organization 2017 9 Pages PDF
Abstract
This paper extends Bikhchandani, Hirshleifer and Welch's informational cascade model by introducing two types of players, experts with high signal accuracy and laymen with low signal accuracy. Assuming players randomize when indifferent, if a small enough group of laymen are present in the population, the probability of having a correct cascade is strictly higher than if no laymen are present. The same result is robust to almost every tie-breaking rule.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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