In the literature this effect has been explained as an “informational cascade.” As Sushil Bikhchandani, David Hirshleifer, and Ivo Welch, the authors of the paper “A Theory of Fads, Fashion, Custom, and Cultural Change as Informational Cascades” put it: “An informational cascade occurs when it is optimal for an individual, having observed the actions of those ahead of him, to follow the behavior of the preceding individual without regard to his own information.”2
