The Rich get Richer
http://www.wsj.com/articles/the-rich-get-richer-as-billionaires-increase-in-number-1470628860
As we discussed in the lecture, the network is set in such a way that once a cascade starts it keeps growing continuously. This is the case for the wealth distribution in the population. The article above describes the current position of billionaires in the world. As seen in the article, the wealth of billionaires combined has been increasing, which tallies with our expectation from Information cascade. Just like popularity, the fraction of the wealthy individuals remains small and their wealth keeps growing because of copying.
Another important observation is that their number is increasing too. We would expect that for them to remain wealthy the rest of the population should be poor. This is partly true. Their number is not increasing at an alarming rate, but it still defies common logic. This is because the growth of wealth and popularity follows the 1/k fraction. After learning about power laws, this situation can be better understood as a product of copying. The common people tend to copy what the friends in their network are doing. Since these billionaires are already famous among most people, the chance of a new individual spending money or investing in their wealth keeps increasing because people tend to copy each other. The power of information cascade has created a barrier for new individuals to suddenly get richer from scratch since most the network is directed towards the few.