Localized conformity has been recognized as one of the norms of social learning. Based upon the observations of investors' behavior in Taiwanese stock market, this article adopted structural equations modeling and multi-group testing to explore individual investor's decision-making process and related performance. It was concluded that the phenomena of information cascades do exist in investor's decision-making process, so do the positive payoff externality as well as poor information aggregation. Differences in information preference and the effects of information cascades were also found between experienced investors and new comers. Finally, the paradoxicality was observed in the study, which states that, due to poor information aggregation, information cascades would not necessarily lead to more accurate investment decisions.
