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Information Cascades Caused by Facebook Events

The link below is to a man’s story describing his experience in using Facebook to have a party. A man named Hal in Toronto plans to throw party in the hopes of revitalizing his social life since he has recently become busy with his family and job. He creates an event on Facebook and invites all of 700 Facebook friends. 15 people saying they will attend, 60 say maybe, a few hundred say no, and the rest do not respond. Hal expects about 20 people to come to his party, but sadly only one person shows up, and even she did not stay for the entire party. Hal despondently wonders how he could have 700 Facebook friends but end up drinking alone that night.

To explain Hal’s disappointing party, one could look at the ideas of network effects and information cascades. The setup of the RSVP through a Facebook Even is like a public poll, which allows for an information cascade to occur. People will follow the majority, so if the first few people say that they will not attend the party, most of the people to see the initiation page after are likely to choose not to attend the party as well. They might think that the party is not worth attending, if most other people are choosing not to go. Network effects occur – potential partygoers care about how many other people want to attend this party.  Other people seeing the page do not have as much of an incentive to attend the party, since few people want to go.

If it were a normal RSVP, not a Facebook event where the number of attendees is visible to all the people who were invited, more people might have shown up. However since each invitee could see how many people (of all of those who had already RSVP’d) were planning on going, the rest of the users were able to see that the vast majority of people were not planning on going and therefore were likely to also RSVP no. (Even those who had RSVP’d yes or maybe and were still on the fence about going probably chose not to since they could see that most people were not going.) The information cascade caused by this man’s Facebook event party planning is just one example of how the concepts of networks are applicable to everyday life.

http://www.nytimes.com/2008/10/26/magazine/26lives-t.html?_r=4&partner=permalink&exprod=permalink&

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