Information Cascades causing turmoil in Europe
http://www.economist.com/blogs/democracyinamerica/2011/10/mass-movements
Information cascades are when a person observes the actions of others and then—despite possible contradictions in his/her own private information signals—engages in the same acts. The article talks about how the stock market is the prime example of an information cascade. “Essentially, the stock price became a freelance entity divorced from any semblance of corporate fundamentals. For such an entity, when the price is rising, more people buy, driving the price up. When the price is falling, more people sell, driving the price down. There is no equilibrium and no underlying value.”
The article then goes on to show how there are people rioting in NYC that then lead to people rioting in Boston and then this rioting spread to all of Europe, including London and Amsterdam. So what does that mean in the long run. Well nothing really. This just shows that information is being spread across the world fast and today with facebook and all this social media and world wide media in the news, everyone is succumbing to the same logic around the world and a lot of people are just following masses. Information Cascades are becoming larger and larger as media is becoming easier to see or hear, and people are more likely to believe what they hear than do their own research.