The topic of this research paper (Princeton University) is information cascades. The concepts are the same as many of the principles that we have gone over in class, however they are developed much further to explain phenomena observed in real situations. The experiments involve a simple scenario, with many decision makes, two choices, and some input regarding the choices. This is very similar to the “restaurants in a foreign country” example described in lecture. The results show that often times in real situations the cascade is broken, contrary to the predicted outcomes of a Nash Equilibrium. The method used to describe the behavior was a technique called “Quantal Response Equilibrium” (QRE). This is a much more complex method and has proven to have much more accurate predictions. The main phenomenon that the paper is focused on is that of self- correcting cascades. Sometimes in a real situation an information cascade is broken. This means that sometimes a decision maker will make a decision against the cascade. However, in some situations this deviation is only temporary, and the cascade can re-establish itself. Very interesting paper, certainly worth reading.

http://www.princeton.edu/~tpalfrey/cascade_exp_030206.pdf