Do I Follow My Friends or the Crowd?
Lee, Y., Kosanagar, K., & Tan, Y. (2015). Do I Follow My Friends or the Crowd?: Information Cascades in Online Movie Ratings. Management Science, 61(9), 2241-2258. https://doi.org/10.1287/mnsc.2014.2082.
When deciding on whether or not to watch a movie online via a streaming service or physically going to the movies, a person is likely to look out for what the crowd and their close friend group says about the movie. Similarly, does the crowd and a person’s network contribute to the type of review, positive or negative, a person gives online? This journal article seeks to tackle three main questions: (1) “Do prior ratings of the crowd and those of friends differently influence a subsequent user’s rating for a movie in an online community?”; (2) “Does the influence of different types of prior ratings differ based on the popularity of the movie?”; (3) “How does the social influence relate to the level of social interaction among users?”
In Chapter 16: Information Cascades, we learned that herding/information cascades are a result of imitating the behavior of others, but also that “This is not a mindless imitation.” Indeed, movie reviewers are impacted by previous movie reviews in a significant way depending on their relationship with the previous reviewers. First, this study found that a person’s movie rating is usually differentiated from niche movies and an information cascade is created for popular movies. Second, a person’s ratings always herd with friends regardless of movie popularity. Lastly, a person’s movie ratings move past the crowd’s information cascade as interaction with friends increases.
When thinking about the information cascades of Chapter 16 which looks at the crowd and the cascading behavior in networks in Chapter 19 which looks at smaller friend groups, these conclusions can be characterized as completely sound.