Information Cascade 2008 Financial Crisis
http://economistsview.typepad.com/economistsview/2008/10/informational-c.html
This article talks about information cascades and their potential impact on the housing bubble and the 2008 financial crisis. First he explains in simple terms how an information cascade works. It explains how every person has their own private information but can also view what other people are doing as well and take that into consideration when making a decision. It also gives some more general examples of information cascades such as how music or movies become popular. Finally he moves onto a discussion about the financial crisis in particular where he cited a study by Shiller and Karl Case in 2005 which found that a major influencing factor was information cascades. Other people were buying housing which influenced more people to do so as well. Experts also weighed in with the opinion that housing prices would continue to rise.
This article is a clear real life example of information cascades. Most people knew others who were investing in the real estate market anticipating a continuously rising market. This influenced people who may not have been interested in buying a house to buy a house. There were also expert opinions e.g. people you think who have extra information who have extra weight when making a decision who claimed that the housing market would rise. The combination of large amounts of the public pursuing this strategy and many experts encouraging the strategy lead to one of the worst financial crises in modern history.