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Information Cascades and Over-Hyped Restaurants

You sit down at a dimly lit restaurant. The waiter brings you a cocktail and a small tuna tartare. After eating four bites of the slightly above average dish, your bill comes out to $45. However, when your friend asks you how you liked the restaurant, you will probably say it was a great time and recommend going again.

This scenario seems crazy but happens very often for over-hyped restaurants, and the reason for this is information cascades. When a restaurant first opens up, if enough people initially give it great reviews, it will gain a permanent high reputation. Even if the quality of food goes down or prices skyrocket, the reputation will remain the same because of the information cascade that has been created. Furthermore, social media websites like Open Table, Trip Advisor, and Yelp facilitate the cascade by instantaneously sharing information with other people. Other factors can also help facilitate the cascade such as famous restaurant owners or chefs. In the article above, the first restaurant listed is Trump Tower. By Trump supporting this restaurant, his opinion carries more weight than others so his support will bring the situation to a cascade easier.

I personally have felt this affect when going to restaurants with my family. Many times I’ve sat at a highly rated restaurant and ate average food while my parents rave about how good it is. The proportions are extremely small and there are more decorations on the dish than actual substantial food. However, because we enter the restaurant with the expectation of a delicious meal, we tell ourselves to enjoy the food much more than we actually should. In accordance with the high reputation comes a sense of fanciness and delicacy. Slowly pouring water from a height, creating a ring of basil leaves around the food, or talking in a hush tone all add to the sense of allure of the restaurant but in reality are just a consequence of the false esteem the restaurant has acquired.

Over-hyped restaurants also don’t have to be limited to sit-down expensive ones. A restaurant chain like Chipotle is undeniably one of the most popular places to eat. However, often the lines are extremely long, the portions of food are small, and the ingredients are on the older side. Regardless, you will probably tell yourself you are very satisfied after eating Chipotle. Many other Mexican fast food stores with a lower reputation have better food for lower prices, but they do not do as well because they have not reached a positive information cascade. This concept is seen easily with restaurants but also can be applied to movies, TV shows, sports teams, events, or any other part of life.


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November 2018