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Information Cascade; how it can be used to cause an adverse outcome to a nation

A Nazi propaganda minister, Joseph Goebbels once said, “Let me control the media and I will turn any nation into a herd of pigs.” Goebbels, who often turned words into destructive weapons, believed that with a spread of false propagandas through the mass media, a desired crowd manipulation can be easily achieved. In April 2008, the South Korean government and its ministry of foreign affairs agreed to lift the ban on American beef, which was initially imposed in 2003 due to a reported case of mad cow disease detected in Texas. Soon after the government agreed upon the negotiation with the US government to import American beef, however, some of the major news media on the internet and TVs began to harshly condemn the deal, denouncing the potential danger of getting mad cow disease by eating infected beef (possibly caused by anti-government (or anti-US) forces, most likely by DPRK sleeper cells that had infiltrated various national institutions of South Korea, including the congress and the news media). A major controversy was aroused by a false report of a fairly authoritative investigative journalism program in South Korea called PD Notebook, which rapidly fired up the riot. The government made it clear multiple times that the possibility of getting infected by mad cow disease is negligible, giving statistical data from WHO that in 2008, there were only 207 people around the world who are infected by the disease. Among these people, only 3 were American citizens. Still, protestors broke into several groups of thousands and continued to occupy the central Seoul city hall, engaging in violent shoving matches with the police for months. According the KERI (Korea Economic Research Institute), 3.7513 billion dollars of losses were incurred due to the riot.

This phenomenon of crowd manipulation could be directly related to the concept of information cascade that we learned in class. In many occasions, a rational person simply prefers to reject his or her personal opinions based on the “private information,” and instead, chooses to follow the crowd, presuming that the crowd has an access to the information that he or she does not have. In other words, a person chooses to imitate the decisions of others regardless of possible alternative choices he or she has. The incident in South Korea can also be perceived as a consequence of information cascade. Nowadays people are connected in an intricate set of networks through the development of mass media, such as internet or social networking service. The nature of this complex web of networks intertwining the crowd, it is possible for a small group of people to start the cascade of false information or rumors, ultimately causing the desired population-wide aggregate individual behaviors and detrimental collective outcomes to arise.

Reference

http://www.nytimes.com/2008/06/30/world/asia/30korea.html

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