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2000-09-12Buch DOI: 10.18452/3444
Limited depth of reasoning and failure of cascade formation in the laboratory
dc.contributor.authorKübler, Dorothea
dc.contributor.authorWeizsäcker, Georg
dc.date.accessioned2017-06-15T21:00:47Z
dc.date.available2017-06-15T21:00:47Z
dc.date.created2005-10-07
dc.date.issued2000-09-12
dc.identifier.issn1436-1086
dc.identifier.urihttp://edoc.hu-berlin.de/18452/4096
dc.description.abstractWe examine the robustness of information cascades in laboratory experiments. Apart from the situation in which each player can obtain a signal for free (as in the experiment by Anderson and Holt, 1997, American Economic Review), the case of costly signals is studied where players decide whether to obtain private information or not, at a small but positive cost. In the equilibrium of this game, only the first player buys a signal and chooses an urn based on this information whereas all following players do not buy a signal and herd behind the first player. The experimental results show that too many signals are bought and the equilibrium prediction performs poorly. To explain these observations, the depth of the subjects’ reasoning process is estimated, using a statistical error-rate model. Allowing for different error rates on different levels of reasoning, we find that the subjects’ inferences become significantly more noisy on higher levels of the thought process, and that only very short chains of reasoning are applied by the subjects.eng
dc.language.isoeng
dc.publisherHumboldt-Universität zu Berlin, Wirtschaftswissenschaftliche Fakultät
dc.subject.ddc330 Wirtschaft
dc.titleLimited depth of reasoning and failure of cascade formation in the laboratory
dc.typebook
dc.identifier.urnurn:nbn:de:kobv:11-10048540
dc.identifier.doihttp://dx.doi.org/10.18452/3444
local.edoc.container-titleSonderforschungsbereich 373: Quantification and Simulation of Economic Processes
local.edoc.pages24
local.edoc.type-nameBuch
local.edoc.container-typeseries
local.edoc.container-type-nameSchriftenreihe
local.edoc.container-volume2001
local.edoc.container-issue3
local.edoc.container-year2000
local.edoc.container-erstkatid2135319-0

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