← all facts
psychology
Your choices often follow the crowd's momentum.
The probability of an individual adopting a behavior increases as more people do the same, because individuals use others' actions as signals of information to make more accurate decisions.
The mechanism described by Bikhchandani, Hirshleifer, and Welch (1992) is informational, not social/normative; it suggests individuals ignore their own private information in favor of public signals to maximize personal accuracy, not social harmony.
You follow the crowd to avoid the cost of being alone.
Where this comes from
- Study
- Bikhchandani, Hirshleifer, and Welch, 1992
- What the check found
- While the 1992 paper by Bikhchandani, Hirshleifer, and Welch accurately describes informational cascades, the supporting text mischaracterizes the mechanism as driven by social harmony rather than utility-maximizing information usage.
- Confidence
- Solid, with limits
Related
One of these every day, and every one names the study it came from. When a finding is contested, it says so.