Information Cascade and Social Networks
An information cascade occurs when individuals make decisions based on other people’s decisions. Individuals reach conclusions based on the limited information they have acquired and by observing what other people do. An example we used in class was guessing the majority color of the bin based on what you picked and what others before you guessed. So if you were the fourth person to guess then you would most likely choose the color guessed twice even if your color was different.
An example of this is shown through Facebook during the recent election. In the article attached, it talks about how liking a post or article affiliated with a certain political party will cause more news related to that political party to show up. This makes it seem like everyone is voting for that particular political candidate and enforces your support for the candidate. Moreover if all your friends post on Facebook supporting a particular candidate then you are more likely to vote for that person even if you don’t know a lot about either of the candidates. Fake news on Facebook also influenced the way people voted. This is an information cascade because readers base their decision on inferring that the article was true.
https://theintercept.com/2016/11/10/facebook-im-begging-you-please-make-yourself-better/