  In this paper, we relate the philosophical literature on pessimism traps to
information cascades, a formal model derived from the economics and mathematics
literature. A pessimism trap is a social pattern in which individuals in a
community, in situations of uncertainty, begin to copy the sub-optimal actions
of others, despite their individual beliefs. This maps nicely onto the concept
of an information cascade, which involves a sequence of agents making a
decision between two alternatives, with a private signal of the superior
alternative and a public history of others' actions. Key results from the
economics literature show that information cascades occur with probability one
in many contexts, and depending on the strength of the signal, populations can
fall into the incorrect cascade very easily and quickly. Once formed, in the
absence of external perturbation, a cascade cannot be broken -- therefore, we
derive an intervention that can be used to nudge a population from an incorrect
to a correct cascade and, importantly, maintain the cascade once the subsidy is
discontinued. We study this both theoretically and empirically.
