Cutting of Ties With Disgraced Rapper Representing Information Cascade
Over the past several weeks, controversial music figure Kanye West has lost dozens of brand deals that he had accumulated over decades due to his antisemitic and insensitive statements on public networks. His losses in net worth due to brands cutting his deals have totaled over one billion dollars, an incredibly large portion of his net worth. Initially, his future was up in the air because Kanye West is such a huge figure in both culture and music, his brand deals are usually quite lucrative for the brand’s involvement and sales worldwide. His ability to bring wealth to brands made it a contested decision for brands to cut ties with him, as in many cases their expected payoff was lower, as their social gain did not outweigh the economic loss of cutting ties with the popstar. However, as more brands began to cut ties with Mr. West, other brands expected payoff began to change due to increased pressure following the social success of brands that canceled his deals.
The eventual cancellation of nearly all of his brand deals is a representation of an information cascade, where brands had incomplete data about how much cutting off the artist would affect them socially and economically, but based off of the decisions of other brands to terminate his contract, they were able to assume they would stand to have a positive expected payoff. Initially, Adidas was among the first to cut Mr. West, as they are one of the largest brands that had a deal with the rapper and were also considered to be one of the closest to his fortune as Adidas had a history of public collaboration with Mr. West over many years. Once Adidas, the first player in the cascade, made the decision to terminate his contract and saw a positive overall outcome from public support. This led many other brands to make a similar call under the pretense that since other companies made the same call, it must have a higher chance of paying off positively, a good example of an information cascade where regardless of what brands further down the line may have discovered through personal research, the conclusions of other brands swayed their actions to stay in line with the cascade. This has become a relatively common phenomenon in popular culture, where when a particular individual or brand acts against public opinoin, their presence and existing access being terminated faces a sort of information cascade where if their initial partners cut ties then it will ripple down to virtually every industry connection they maintain, or if the original partners decide to maintain relations despite some negative PR, then it is unlikely that other brands would then step out of the cascade and cut ties on their own.
Links:
https://www.academia.edu/50141648/No_more_heroes_trophic_cascades_and_cancel_culture
https://economictimes.indiatimes.com/news/international/us/kanye-west-loses-over-1-billion-in-deals-says-hes-been-beat-to-a-pulp/articleshow/95184969.cms