Helpful laymen in informational cascades

Abstract

This paper extends Bikhchandani, Hirshleifer and Welch's informational cascade model by introducing two types of players, experts with high signal accuracy and laymen with low signal accuracy. Assuming players randomize when indifferent, if a small enough group of laymen are present in the population, the probability of having a correct cascade is strictly higher than if no laymen are present. The same result is robust to almost every tie-breaking rule.