On the convergence of informational cascades
Ho, Lee In (1993) On the convergence of informational cascades. Journal of Economic Theory, 61, (2), 395-411. (doi:10.1006/jeth.1993.1074).
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Description/Abstract
This paper investigates the problem of information aggregation in a sequential action model. In a model in which agents sequentially take actions after observing the action history and a private signal, an informational cascade is defined as an event in which the sequence of actions converges to a limit and a fully revealing informational cascade is defined as an event in which the sequence converges to a limit which is optimal under the true state. The necessary and sufficient condition for the occurrence of a fully revealing informational cascade almost everywhere is established. The necessary and sufficient condition is interpreted using the characterization in Milgrom [Econometrica47 (1979), 679–688] and McKelvey and Page (Econometrica54 (1986), 109–127]. Journal of Economic Literature Classification Numbers: C44. D81, D83.
| Item Type: | Article |
|---|---|
| ISSNs: | 0022-0531 (print) |
| Related URLs: | |
| Subjects: | H Social Sciences > HB Economic Theory |
| Divisions: | University Structure - Pre August 2011 > School of Social Sciences > Economics |
| Item ID: | 32988 |
| Date Deposited: | 12 Dec 2007 |
| Last Modified: | 02 Mar 2012 13:06 |
| Contributors: | Ho, Lee In (Author) |
| Date: | December 1993 |
| Status: | Published |
| URI: | http://eprints.soton.ac.uk/id/eprint/32988 |
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