Information Cascades: Cooperators or Cheaters?
When newcomers join a community, they are likely to copy the social networks of a role model they picked. In the study about the collapse of cooperation, researchers divided the participants in the networks into two types: cooperators who contribute to the community, and cheaters who exploit the cooperators. It is like group work that is not very successful, with free riders who don’t work and take others’ contributions for granted. Obviously, it will be beneficial to interact with cooperators while harmful with cheaters. However, the information is too limited to determine the identity of community members. If more previous newcomers have connected to a node, then following their decision might be appropriate because newcomers will assume the previous ones know more information to make the choice. Thus, information cascades might occur and damage cooperation.
We have learned in class that people are influenced by others in many ways, such as the opinions they hold and what they do. People are social animals who have the tendency to follow the crowd, which is imitating others even if the private information suggests that one should do otherwise, like fashion trends and joining lineups. The decisions are made based on a combination of public and private information, but erroneous results happen when private and public information conflict. According to the model of sequential decision making, when everyone has private information that helps guide their decision, seeing the public information – the sequential decisions made by others, your own decision will follow suit.
In the paper, the premise is to set a fixed amount of private information. There are four situations: Ture positive, when a newcomer establishes a connection with a cooperative node; false negative, when a newcomer decides to not connect with a cooperator; false positive, when a newcomer connects with a cheater; true negative, when a newcomer decides not to connect with a cheater. P-cascade occurs when the private information indicates that a connection should be made while it is not made due to the public information. On the other hand, N-cascade happens when the private information indicates that a connection should be made and is made due to the public information. The collapse of cooperation is correlated with an increase of the N-cascade because the same node will be chosen by more newcomers.
The reality is more complex. There will be situations that private information is not fixed, or cooperative nodes mix with cheaters. The strength of private information and public information will also affect the result of their conflicts. The study is just a sample to elaborate on information cascades.
Source:
Yang, G., Csikász-Nagy, A., Waites, W. et al. Information Cascades and the Collapse of Cooperation. Sci Rep 10, 8004 (2020). https://doi.org/10.1038/s41598-020-64800-z