Information cascades and rational herding: an annotated bibliography and resource reference

Abstract

Information cascades occur when individuals make decisions based on the actions of others, rather than on their own private information. These cascades can lead to collective irrationality, where everyone makes the wrong choice despite having access to information that would suggest the opposite. This paper presents an annotated bibliography of the academic literature on informational cascades, reviewing theoretical models, empirical studies, and casual examples. The literature examines the conditions under which cascades form, their impact on social and economic outcomes, and their potential for fragility. – AI-generated abstract.