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Finding Alpha through Information Cascade

Last year’s August, Carl Icahn, one of the “big names” in Wall Street suddenly announced that he holds a large amount of Apple’s shares through Twitter. After this news, price of Apple’s shares abruptly increased by almost 6%. The day after, George Soros, another major player in the Wall Street, also announced that he had […]

Apple Vs. Google: Vying for a Higher Fraction of the Population

Since the first article linked below was written in February of 2013, a major shift in the market statuses of Apple and Google has occurred. When the article was written, Google’s share price had just surpassed an all time high of $800, while Apple was continuing to “freefall.” Despite the state of affairs between the […]

Bayes’ Rule in Criminal Profiling

The show Criminal Minds has brought a lot of attention to the role of criminal profiling in police investigations. The show highlights the Behavioral Analysis Unit of the FBI and their ability to determine specific characteristics of suspects based on the nature of their crimes. These characteristics are used to narrow down the list of […]

Information Cascades and Their Potential Dangers

One of the main focuses in lectures recently (and personally, one of my favorite topics of the course) is how people within a network can influence each other. In fact, the influence of other people may be so strong that people tend to even join the crowd regardless of their own thoughts, otherwise known as […]

The problem with false reviews

Convincing yourself to visit a new place whether it’d be a restaurant, hotel, shopping mall, etc. can potentially be a battle. This is now solved with the use of Yelp, Google, Foursquare, and other review hosting websites. This article, “Yelp, Google and Urbanspoon targets for fake reviews” discusses and says that almost 15% of […]

Conquering the Network Effect may not be Enough to Grow a Successful Business

Many fledgling businesses in markets with significant network effects never achieve any substantial user base; they simply can’t muster enough momentum to push past that unstable equilibrium and begin to grow rapidly towards a large number of active users. Zvents, an events site that provides local listings to hundreds of local markets, achieved the dream: […]

Bayes Theorem and Finding Flight 370 The article describes how statisticians can apply Bayes Theorem to help locate the missing Malaysia Airlines Flight 370 plane. It starts with a basic description of Bayes Theorem, and how it can be applied to real world scenarios. This is relevant to our class as we also discussed Bayes Theorem and its applications. In […]

How Blizzard Entertainment thrives

Roughly every two years, Blizzard Entertainment releases a new expansion to their most valuable game World of Warcraft. But a question that is constantly asked is, how do they manage to charge a monthly fee in addition to expansion costs and not only maintain the amount of users they currently have but grow as well? […]

Why Information Cascades and Financial Markets Don’t Mix Well

In his article, “Forward and Falsely Induced Reverse Information Cascades”, Michael Seiler focuses on information cascades in the context of real estate. Seiler investigates the behavior of a group of university students (who represent the average person with little knowledge of the real estate market) when confronted with a hypothetical problem: would they resign a […]

Playing Catch-up: Jump Starting Cascades with Massive Investment

In order to supplant companies currently providing a set of goods or services, it is necessary for a new company to attract some threshold critical mass of support to survive initially. This can be very difficult if consumers are well served by the existing options. As a result, in industries with high barriers to entry […]

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Blogging Calendar

November 2014