DP3287 Informational Cascades and Decision to Migrate

Author(s): Gil S Epstein
Publication Date: March 2002
Keyword(s): herd behaviour, informational cascades, Migration, network-externalities, xenophobia
JEL(s): F22, J61
Programme Areas: Labour Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=3287

We introduce the idea that informational cascades can explain the observed regularity that emigrants from the same locations also tend to choose the same foreign locations. Thus informational cascades generates herd behaviour. Herd behaviour is compared with the network externalities explanation of the same phenomenon. The relation between social tensions and herd behaviour is observed when local populations are xenophobic.