Rational Herds: Economic Models of Social Learning

"Christophe Chamley brings the reader to the state of the art in formal modeling of social learning. His treatment of this burgeoning literature is extraordinarily clear and comprehensive. This book, by an author who has himself made major contributions to the subject, is destined to become a standard reference in the area." Sushil Bikhchandani, UCLA"Over the past decade there has been an explosion of interest in the field of social learning. Far from being a fad, this field is developing into one of the richest areas of economic research, with an ever-growing list of applications. Christophe Chamley has made profound contributions to the growth of the field, and presents us now with the definitive guide. His book is essential reading not only for graduate students, but also for current researchers trying to stay abreast of new findings. It helps us understand not only where the literature came from, but also where it is going." Andrew Caplin, New York University"This book is a notable achievement. It is ambitious in scope, and provides substantive understanding of how different models in the area work. It offers a deep understanding of the range of validity of different conclusions in the literature and the relations between different possible model results. The general economist will find a rigorous and lucid in-depth introduction to the field. Even experts in the field will find here many challenges as well as enlightenment. Chamley's book promises to be the key reference on rational models of social learning in economics for some time to come." David Hirshleifer, Ohio State University"Chamley has chosen a topic of great interest to all academics in the social sciences. The tendency of human beings to conformity intrigues social psychologists and anthropologists, and the implications of mass behavior are important in politics, economics, and finance. Chamley fully understands this material and conveys it clearly in this book." Peter Norman Sorensen, University of Copenhagen

This book is the first in the exciting new field of social learning. It provides a synthesis of the theoretical literature of the last ten years with some empirical applications. Social learning is about individuals learning from the behavior of others and may lead to spectacular outcomes such as herding, fads, frenzies, crashes, and booms. The book shows how these pathologies may occur in a society of rational individuals.

This book provides a synthesis of the theoretical literature of the last ten years with some empirical applications. Social learning is about individuals learning from the behavior of others and may lead to outcomes such as herding, fads, frenzies, crashes, and booms.

Part I. Social Learning; Part II. Coordination; Part III. Financial Herding.