Noeth, Markus: Information Aggregation with Random Ordering: Cascades and Overconfidence
World Conference Econometric Society, 2000, Seattle

Markus Noeth, University of Mannheim
Martin Weber, University of Mannheim
Information Aggregation with Random Ordering: Cascades and Overconfidence
Session: C-11-26  Tuesday 15 August 2000  by Noeth, Markus
In economic models, it is usually assumed that agents aggregate their private and all available public information correctly and completely. In this experiment, we identify subjects' updating procedures and analyze the consequences for the aggregation process. Decisions can be based on private information with known quality and observed decisions of other participants. In this setting with random ordering, information cascades are observable and agents' overconfidence has a positive effect on avoiding a non-revealing aggregation process but it reduces welfare in general.
Submitted paper full-text in .pdf


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