Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/17944
Authors: 
Fiore, Annamaria
Morone, Andrea
Year of Publication: 
2007
Series/Report no.: 
Economics Discussion Papers / Institut für Weltwirtschaft 2007-21
Abstract: 
Seminal models of herd behaviour and informational cascades point out existence of negative information externalities, and propose to ?destroy? information in order to achieve social improvements. Although in the last years many features of herd behaviour and informational cascades have been studied, this particular aspect has never been extensively analysed. In this article we try to fill this gap, investigating both theoretically and experimentally whether and to which extent destroying information can improve welfare. Our empirical results show that this decisional mechanism actually leads to a behaviour more consistent with the theory that in turn produces the predicted efficiency gain.
Subjects: 
Informational cascades
information externality
individual decision making
experiment
JEL: 
C91
D62
Creative Commons License: 
http://creativecommons.org/licenses/by-nc/2.0/de/deed.en
Document Type: 
Working Paper

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