How did the real estate crisis of 2007-2009 serve as an example of an Information Cascade?

The real estate crisis of 2007-2009 is an example of an Information Cascade because it demonstrates how individual decisions can be heavily influenced by the actions of others, leading to a chain reaction or 'cascade'. In this case, as more people started buying houses, others followed suit, assuming that it was a good decision because many others were doing it. This increased demand led to a rise in home prices. However, when the bubble burst, the prices crashed, leading to a crisis. This is a classic example of an Information Cascade, where people's decisions are based more on what others are doing rather than their own information or judgement.