Journal of Political Economy Vol. 100 No. 5 1992

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

Abstract

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

Issue

5

Pages

992-1026

Language

en

Sources

crossref openalex

Cite

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