Epistemic Cascade

An epistemic cascade is a sequential process in which agents adopt a belief not because they have evaluated the evidence independently, but because they observe prior adoption by others and rationally infer that those others possess private information supporting the belief. The result is a herding dynamics in which a community converges on a belief that may be false, even though every individual agent acted rationally given their limited information. Epistemic cascades are a canonical pathology of epistemic networks with sequential information flow, and they demonstrate that rational individual updating can produce collectively irrational outcomes when network structure is ignored. The classic model (Bikhchandani, Hirshleifer, and Welch 1992) shows that once a cascade begins, public information overwhelms private signals, and further evidence is ignored. See also Information Cascade and Social Learning.\n\n\n