Ownership herding and informational herding

Abstract

This article takes as its point of departure the herding model of Bikhchandani et al. (1992). We extend earlier experimental evidence to distinguish between informational herding, as in the model, and ownership herding, an alternative explanation for observed behaviour.

Acknowledgements

The author is grateful to John Hey for useful discussions, to David Laibson and to the participants to ESA annual meeting (2006) in Tucson for insightful comments. Financial support from MIUR on the prin 2005 (Comportamenti incoerenti nelle scelte Dinamiche) is gratefully acknowleged.

Notes

¹ Except in one in which only nine subjects participated.

² The GAUSS programme used in the estimate is available on request. See Technical Appendix.