Upcoming Talk: In Defense of Information Cascades, 3/26, Guelph

Publish Date: 
Tue, 03/19/2013 - 00:10

Biomathematics and Biostatistics Seminar, University of Guelph, Guelph, Ontario, Canada
Tuesday, Mar. 26, 2:00 - 3:00 pm
SCIE, rm. 1511

In Defense of Information Cascades

Lee Worden

The Information Cascade model (Bikhchandani et al., 1992) is widely cited as an explanation for failure of the "wisdom of crowds", that is, suboptimal collective behavior among rational agents. Upon relaxing the model's premises by restricting agents' influences to local contacts, rather than fragile, contingent outcomes on the whole-population level we see robust integration of agents' private information, and the crowd's wisdom is not undermined.

Bikhchandani, Hirshleifer and Welch, 1992. "A Theory of Fads, Fashion, Custom, and Cultural Change as Informational Cascades", Journal of Political Economy, Vol. 100, No. 5 (Oct., 1992), pp. 992-1026. http://www.jstor.org/stable/10.2307/2138632

Open research links:
* The talk's slides
* The draft paper

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