Information Cascades and Social Learning

Social learning is the updating of beliefs based on observation of others. Such observation can lead to efficient aggregation of information, but also to inaccurate decisions, fragility of mass behaviors, and, in the case of information cascades, to complete blockage of learning. We review the theory of information cascades and social learning and discuss important themes, insights, and applications of this literature as it has developed over the last 30 years. We also highlight open questions and promising directions for further theoretical and empirical exploration. (JEL D71, D82, D83, D91, Z13)

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Publication Details

Journal
Journal of Economic Literature
Published
2024-09-01
DOI
https://doi.org/10.1257/jel.20241472
Citations
50
Primary Topic
Opinion Dynamics and Social Influence
Type
article
Field-Weighted Citation Impact
13.78
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article

Information Cascades and Social Learning

Sushil Bikhchandani, Omer Tamuz, David Hirshleifer, Ivo Welch
50 citations
Journal of Economic Literature
Opinion Dynamics and Social Influence
13.78
article

Information Cascades and Social Learning

Sushil Bikhchandani, Omer Tamuz, David Hirshleifer, Ivo Welch
article en
50 citations

Abstract

Social learning is the updating of beliefs based on observation of others. Such observation can lead to efficient aggregation of information, but also to inaccurate decisions, fragility of mass behaviors, and, in the case of information cascades, to complete blockage of learning. We review the theory of information cascades and social learning and discuss important themes, insights, and applications of this literature as it has developed over the last 30 years. We also highlight open questions and promising directions for further theoretical and empirical exploration. (JEL D71, D82, D83, D91, Z13)

Journal of Economic LiteratureVol. 62(3)
University of California, Los Angeles (US), Anderson University - South Carolina (US)
No poverty
Openalex Percentile: Top 1%
Opinion Dynamics and Social Influence
13.78
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Information Cascades and Social Learning — Sushil Bikhchandani, Omer Tamuz, et al. · Journal of Economic Literature (2024) | TGRS Research Map | TGRS