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The Real Reason Behind Rioting: Information Cascades

http://voxeu.org/index.php?q=node/7156

In recent years, economists have struggled to explain why regime changes occur in certain governments, and why riots ensue to try and force a regime change.  While it is not directly clear as to how or why these riots and upheavals occur, economists have begun to explain the phenomena using information cascades.  Chris Ellis and John Fender, economists at the University of Oregon and the University of Birmingham respectively, use information cascades to describe political regime change as a result of revolution.  An information cascade is defined as a situation in which people formulate their decisions as a result of observing the actions of other people.  In their study, Ellis and Fender found a direct link between information cascades and the revolutions of workers against their parent companies.  Often, some workers appear unaware that their working conditions are perceived as “poor” by some of their peers, and do not think of uniting to revolt against the company until someone else steps up first.  That person’s actions ultimately influence several others, allowing the movement to grow due to the cascade of information from one person to another.  Information cascades and the growth of information technologies such as Facebook and Twitter have made rioting and revolutionizing even more common of late.

Ellis and Fender use their theory of information cascades to describe the recent riots in the United Kingdom.  Ease of access to online information transmission helped the rioters coordinate their plans and ideas with others to facilitate large gatherings, and even spread the riots to other cities across the country.  However, according to Ellis and Fender, in order for rioting to occur, information cascades were used to aid in the transition from a low-crime equilibrium to a high-crime equilibrium in the United Kingdom.  Ellis and Fender define a low-crime equilibrium state as a state in which people are afraid that their illegal actions will be punished, and therefore do not commit crimes knowingly, whereas in a high-crime equilibrium, the chance that individual crimes will be punished becomes quite low.  One of the reasons for London’s transition from a low-crime equilibrium to a high-crime equilibrium state was that the rioters said they were rebelling against society to arouse awareness for a “legitimate grievance.”  By convincing others that they were rioting for a good cause, others were compelled to join in, growing the movement significantly.  While rioting is illegal, information cascades helped convince the protesters that they were fighting for a good cause, and that their actions would go more or less unpunished as a result.

It is clear that today, the growth in information technologies has played a large role in the power of information cascades, especially in the United Kingdom.  Political movements and strikes can reach the public very quickly via the internet, and television stations present news with specific biases hoping to sway the public to watch their program.  Information cascades constantly play a role in one’s decision-making, which brings to question whether or not individuals in today’s society are able to make their own decisions without the influence of others.  I remember hearing stories from friends at other colleges about the riots that took place after Osama Bin Laden’s killing was made public information.  Many students were “rioting” simply because everybody else was doing it.  People flooded the streets, smashing cars in the name of “America,” all the while knowing that they were unlikely to be penalized for their actions.  All it took was one person to tell the world about the assassination of Bin Laden, and almost instantly, we see the brief transition to the high-crime equilibrium state described by Ellis and Fender before things calmed down 24 hours later and returned to normal, as predicted.  Now more than ever, information cascades have a powerful impact on individuals’ decision-making.

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