📖 읽기 자료
The concept of 'information cascades' refers to a situation where individuals make decisions based on the observed actions of others, rather than their own private information. This often leads to a chain reaction, where people follow the behavior of early actors, even if that behavior is not optimal. Information cascades can occur in various settings, such as financial markets, fashion trends, or technology adoption, and they help explain why certain ideas or products become popular while others fail.
🎧 듣기 강의
Professor: Let me give you an example from the restaurant industry. Imagine two restaurants side by side—Restaurant A and Restaurant B. Both have similar menus and quality, but initially, a few customers choose Restaurant A by chance. Now, passersby see a line forming at Restaurant A. They assume the line means better food, so they join it, ignoring any personal preference for Restaurant B. Soon, Restaurant A is packed, while Restaurant B remains empty, even though the food is equally good. This is an information cascade: people base their choice on the crowd's behavior, not on their own knowledge. Over time, the cascade strengthens, and Restaurant A becomes the 'popular' spot, while Restaurant B struggles to attract customers, despite having no real disadvantage.