Important Dates

Information cascades are an important social-epistemic phenomenon in which the actions of a few individuals end up determining the actions of the whole group, since latter individuals take cues from and imitate the earlier ones. Real-life examples are thought to include phenomena as diverse as fashion trends, the popularity of books and restaurants, and stock market trends. Information cascades are worrying because the whole group can easily take the wrong action, even if the sum of individual private evidence would make the correct action obvious. Cascading (or imitating) behavior is nonetheless taken to be rational for each individual, because each individual acts on their total evidence, combining public evidence in the form of others' actions and private evidence available to the individual. The problem is that the public evidence quickly outweighs the private, so that the individual's private evidence is not shared with the group, and effectively lost. Critically, real-life, field experiments, and laboratory experiments have consistently shown that many agents "irrationally" go against the crowd, and that groups are much better off as a result. My purpose is to show that these non-conformist agents are not best interpreted as irrational. The key is to consider the consequences of epistemic conformity and non-conformity in a strategic context and over a longer period of time; this better reflects real-world conditions. I do this using agent-based simulations of repeated information cascade problems with performance-based strategy changes. The most surprising and important result is that even the most flat-footed epistemic non-conformists (non-cascaders) flourish within the population, and it is even possible for the supposedly-rational conformists to disappear completely. This is true despite the fact that the conformists typically have higher average payoffs. Explaining this initially-counter-intuitive result requires applying principles of population dynamics from biology; these principles make clear the hidden cost of the conformist strategy and their dependence on non-conformists in the population.

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