Signal Accuracy and Informational Cascades

We extend the Bikhchandani, Hirshleifer and Welch (1992) informational cascade framework to allow for asymmetric signal accuracy. Simulations demonstrate that even small departures from symmetry may lead to non-monotonic effects of signal accuracy on the likelihood of an inefficient cascade.

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Year of publication:	2006-11-28
Authors:	Pastine, Ivan ; Pastine, Tuvana
Institutions:	School of Economics, University College Dublin
Subject:	Learning \| Herding \| Signal Precision

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Extent:	application/pdf
Series:	Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 200620 13 pages
Classification:	D80 - Information and Uncertainty. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005686006