Information Aggregation with Random Ordering

Cascades and Overconfidence

Datos Bibliográficos

ID9707734
AutoresMarkus Nöth (0000-0001-7942-5148, University of Mannheim), Martin Weber (0000-0002-3533-5850, University of Mannheim)
Año2003
Volumen113
Número484
Páginas166-189
Fecha de publicación2003-01-01
Peer ReviewedSí
Open AccessSí
TipoARTICLE
RevistaThe Economic Journal (JOURNAL)
Identificadores de la revistaISSN: 0013-0133 • E-ISSN: 1468-0297
EditorialOxford University Press (OUP) (PUBLISHER)
DOI10.1111/1468-0297.00091
OpenAlexW3020998977
IdiomaEN
Citas recibidas7
Referencias citadas22

In economic models, it is usually assumed that agents aggregate their private information with all available public information correctly and completely. In this experiment, we identify subjects’ updating procedures and analyse the consequences for the aggregation process. Decisions can be based on private information with known quality and on the 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. However, overconfidence reduces welfare in general

Aggregate (composite · Computer security · Data mining · Econometrics · Economics · Information aggregation · Information cascade · Microeconomics · Observable · Overconfidence effect · Private information retrieval · Process (computing · Quality (philosophy · Auction Theory and Applications · Computer Science · Economic Policies and Impacts · Experimental Behavioral Economics Studies · Psychology · Social Psychology