In models of sequential decision making herd behaviour occurs if the signals smart(dumb) agents receive are (un)correlated and if agents have reputational concerns. We show thatintroducing costly effort to become informed about project payoffs (i) eliminates herdbehaviour and (ii) shifts...

We study two aspects of globalization. It allows a decision-maker to go beyond his own local experience and to learn from other decision-makers in addressing common problems. This improves the identification and diffusion of best practices. It also provides extra information to `markets' that...