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Type: Journal article
Title: Two experiments to test a model of herd behaviour
Author: Allsopp, Louise E.
Hey, John D.
Citation: Experimental economics, 2000; 3(2):121-136
Publisher: Kluwer Academic Publishers
Issue Date: 2000
ISSN: 1386-4157
Statement of
Allsopp, Louise ; Hey, John
Abstract: We carry out two experiments to test a model of herd behaviour based on the work of Banerjee (Quarterly Journal of Economics, CVII, 797–817, 1992). He shows that herding occurs as a result of people observing the actions of others and using this information in their own decision rule. In our experiments herding does not occur as frequently as Banerjee predicts. Contrary to his results, the subjects' behaviour appears to depend on the probabilities of receiving a signal and of this signal being correct. Furthermore, Banerjee finds that the pattern of decision making over a number of rounds of the game is volatile whereas we find that decision making is volatilewithin rounds.
DOI: 10.1007/BF01669304
Appears in Collections:Economics publications

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