Following the Crowd: Is it Rational?
The article “The Science Behind Why People Follow the Crowd” by Rob Henderson discusses the influence of group behavior on people and the reasons behind it. Henderson uses research studies to convey that people’s views are reinforced by other people who share similar opinions. He also uses studies to show that people decide how to act based on how other people act because they feel that it is indicative that a certain behavior is correct and/or should not be feared. He argues that these tendencies are a result of two things: the complex world we live in and evolution. Henderson asserts that in the complex and fast-paced world we live in, it is easier to determine if something is useful from its popularity. This is because people do not have enough time to research it and to subsequently make an informed conclusion about it. He also states that humans have an evolutionary need to be a part of a group since it once increased survivability.
This relates to our discussion of information cascades. In this discussion, it was expressed that people are rationally making decisions to imitate the behavior of others. This means that they are copying the behavior of others because they feel that this conveys information about the quality of the product. It was also argued that people may like a product and copy the behavior of others because they think that they would have a similar opinion to these people (the behavior of others is a key piece of information in which people base their decisions). Information cascades are based on people inferring that other people have private information that has informed their decisions. They also may be based on the direct benefits of adopting a behavior that many other people have adopted (the benefit of adopting a behavior may be directly tied to how many other people have adopted it). Also, the influence of sequential decision-making was emphasized since as more people adopt a certain behavior, people that make decisions after them may be influenced by how many people have adopted that behavior. It is also important to note that although this model emphasizes that people behave rationally, this rational behavior can lead to irrational outcomes. This occurs because more people stop basing their decisions on their own private information and instead base them on the decisions of others (and the inferences that they make about other peoples’ private information).
While there are similarities between the arguments made in the article and the model of information cascades discussed in the course, there are differences that are worth mentioning. The article places more of an emphasis on the psychology underlying decision-making (people have a psychological need to be a part of a group) while our model of information cascades stresses rational decision-making. However, they both argue that since information is limited, the decisions of others often serve as vital pieces of information in determining the correctness of a behavior.
References:
-https://www.psychologytoday.com/blog/after-service/201705/the-science-behind-why-people-follow-the-crowd
-http://www.cs.cornell.edu/home/kleinber/networks-book/networks-book-ch16.pdf