A Theory of Fads, Fashion, Custom, and Cultural Change as Informational Cascades

Sushil Bikhchandani; David Hirshleifer; Ivo Welch

doi:10.1086/261849

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A Theory of Fads, Fashion, Custom, and Cultural Change as Informational Cascades

Sushil Bikhchandani¹; David Hirshleifer^2,1; Ivo Welch^2,3

¹ University of California, Los Angeles · ² National Bureau of Economic Research · ³ University of California, Irvine

Journal of Political Economy 1992 open access

An informational cascade occurs when it is optimal for an individual, having observed the actions of those ahead of him, to follow the behavior of the preceding individual without regard to his own information. We argue that localized conformity of behavior and the fragility of mass behaviors can be explained by informational cascades.

DOI: 10.1086/261849
Volume: 100 (5)
Pages: 992-1026
Language: en
Export: BibTeX
Sources: crossref openalex