Information Cascades in Reality
As discussed in class, information cascades are often fragile. This is because they are based on relatively little genuine information and therefore can also be overturned by very little information. People in cascades are aware often aware that the behavior of most other individuals do not reflect their true knowledge, and thus any injection of genuine information can cause great instability at any point in the cascade. However, cascades in real life can actually be much more resilient to change or reversion. When it comes to issues of public opinion, especially, societies can experience dramatic reversals in extremely short periods of time, the results of which can actually turn out to be profound and long lasting.
Timur Kuran and Cass Sunstein, in a recent Stanford Law Review article, defined and analyzed key characteristics of social cascades. In a nutshell, social pressure and expectations can make people proclaim that they want and believe something that they really don’t want or believe. This phenomenon is known as preference falsification, or the declaration of an untruthful belief.
Preference falsification exists in two major contexts, political and social. Politically, people possess both private and public preferences. Public preferences are displayed to comply and gain favor with the ruling regime, while private preference is the certain degree to which a person must remain honest to their own beliefs. Under oppressive authoritarian rule, for example, people will often display outward approval and admiration towards governmental individuals, yet harbor secret distaste and desire for change. When private preferences are sparked in the masses, rebellions can occur.
Another type of cascade that has been proclaimed to be more resilient that information cascades are availability cascades. Kuran and Sunstein’s availability cascades combine the concept of information cascade with that of reputational cascades. Reputation cascades rely, too, on preference falsification. Social pressures to conform exist because of our fear of social retribution, such as isolation and disapproval, and our desire to gain acceptance and affirmation. Once an individual’s societal status is put at stake, increasingly little emphasis is placed on one’s private signal. Our natural inclination to favor people of unity and cooperation prevent us from becoming the maverick. This system of reward and punishment makes new knowledge much less appealing.
Current examples of social movements in the United States that are rapidly taking hold include the gay marriage and recreational drug legalization movements. Though in different states and regions varying opinions have been creating small-scale cascades, these issues are becoming increasingly sensitive in public discourse. Looking back in time, we have had cascades such as the climate and feminist rights movements. These examples are social cascades that have long crossed the population threshold required for fundamental societal change and are now mostly well established. It is safe to say that in the past decade there has been increased stigma associated with denial of global climate change or certain women’s rights ideologies. In fact, to categorize these ideological revolutions as “information cascades,” notorious for being found on little genuine information, is unfavorable and likely politically incorrect in itself.
Articles:
Availability Cascades and Risk Regulation,” by Timur Kuran and Cass Sunstein. Stanford Law Review, Vol. 51, No. 4 (April 1999). [https://econ.duke.edu/uploads/assets/People/Kuran/Availability%20cascades.pdf]
“Following the Herd,” by Pierre Lemieux. (2003-2004).[http://object.cato.org/sites/cato.org/files/serials/files/regulation/2003/12/v26n4-2.pdf]