Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/127244
Authors: 
Drehmann, Mathias
Oechssler, Jörg
Roider, Andreas
Year of Publication: 
2005
Series/Report no.: 
Discussion Paper Series, University of Heidelberg, Department of Economics 420
Abstract: 
Most real world situations that are susceptible to herding are also characterized by direct payoff externalities. Yet, the bulk of the theoretical and experimental literature on herding has focused on pure informational externalities. In this paper we experi- mentally investigate the effects of several different forms of payoff externalities (e.g., network effects, first-mover advantage, etc.) in a standard information-based herding model. Our results are based on an internet experiment with more than 6000 subjects, including a subsample of 267 consultants from an international consulting firm. We also replicate and review earlier cascade experiments. Finally, we study reputation effects (i.e., the influence of success models) in the context of herding.
Subjects: 
information cascades
herding
network effects
experiment
internet
JEL: 
C92
D8
Document Type: 
Working Paper

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