Black Friday: Cascades of Price and Information
Article: http://cameras.reviewed.com/features/herd-mentality-not-deals-drives-black-friday-frenzy
The Friday following Thanksgiving, known as Black Friday, has typically been regarded as the beginning of the Christmas shopping season in the U.S., and most major retailers open very early and offer promotional sales. This drop in price causes massive shopper turnout, but are the low prices the sole reason for the crazy showing? According to Tyler Lynch, writer of Herd Mentality, Not Deals, Drives Black Friday Frenzy, there are many reason beyond just the great deals that draw out shoppers, and most of these reason overshadow the price drops. Lynch’s main argument focuses on why shoppers choose to venture out on Black Friday rather than just order online during Cyber Monday for almost the same prices. For one, Lynch explained that the sheer popularity of the day and the thrill of the crowd motivated shoppers to endure the long lines and dangerous shopping. Due to the ever-recurring popularity and infamy of the day, people will continuously desire to participate in the shopping spree as they notice others doing the same. According to Lynch, “a large group of people is going to behave like a large group of people—irrationally. The reason for that gathering is irrelevant.” Lynch describes here that the price drops are a non-factor, as shoppers only go out on Black Friday because they are “following the crowd”. While Lynch does note that there will be some shoppers that go out specifically to get low prices on certain items, he explains that most are just falling under the crowd spell of Black Friday.
In the past few lectures, we’ve focused on information cascades, what causes them, and through what means they occur. Black Friday is a good example of an information cascade for many reasons. For one, Black Friday can be representative of either an information-based or direct-benefit reasoning. If Black Friday were to actually save people a lot of money (which it does for some people), it can be considered a scenario of direct-benefit. However, if according to Lynch, Black Friday doesn’t really save you that much more money than Cyber Monday and participating is just following the crowd, then it can be considered a scenario of informational reasoning. In terms of an information cascade, Black Friday serves as a cascade already in full swing, as much of the United States follows the behaviors of others to “find the best deal.” The idea of herd or mob mentality is essentially an example of fast moving, large information cascade. While some people may be a part of the mob for personal/financial reasons, many are just following the crowd as they feel there is something to be gained by doing what others do.