Rational Conformity in Sequential Decision-Making: An Experiment of Information Cascades

Information cascade is a rational conformity behavior which is a type of evolutionary economizing the mental cost of agents. This paper addressed an experimental evidence of information cascades with six experiments employing 2 times 2 times 2 treatments in Tianjin. Results show: information cascades reversed less in the asymmetry setting; professional subjects are not employ Bayes rule more frequently than student subjects, and decision accuracy of professional subjects is not higher than that of student subjects; decision accuracy is independent of the order of decision-making; the consistency between private information of current agent and decision result of first agent in same group plays an important role on her behavior and decision accuracy; The accumulative gain/loss and gender of the agent are independent of her behavior; since the mental cost is discount relative to the decision cost in the loss domain, agents will increase the devotion of the mental.