Information Cascades and Spring Break
Sources: http://www.huffingtonpost.com/2012/03/05/top-10-college-spring-break-2012_n_1321292.html
http://www.ststravel.com/blog/sts-travels-top-5-spring-break-vacation-destinations-for-2011/
Spring break is often the highlight of many college students’ calendars. One of the biggest questions that dominates the latter part of the fall semester and the early part of the spring semester is where to go for spring break. According to STS travel, the top locale for spring break in 2012 was Cancun. In fact, Cancun has been the most popular spring break destination since 2010. Why did this occur? The answer may be information cascades.
Information cascades arise when people observe the actions of others and then make the same decision that others have, discarding their own information. This occurs in a plethora of situations: some as far-reaching as the 2008 Financial Crisis, and some as mundane as restaurant popularity. In this instance, an information cascade is the possible reason Cancun was the most popular destination for spring break since 2010.
Cancun may have attained the top spot in 2010 because of an information cascade, and has used that cascade to attain top status in the following years. An information cascade likely caused Cancun to attain the top spot in 2010 because spring-breakers observed a large number of people choosing to go there. While the initial groups to choose Cancun used independent information, the following groups mostly likely discarded their own information and chose Cancun based on the observed actions of those before them. This is an excellent, albeit simplistic, demonstration of an information-cascade on a real-world scale.
An information cascade may have allowed Cancun to maintain its ranking. Spring breakers in the following years could have relied on the previous top ranking to inform their decisions. This would cause them to throw out their own independent information and choose Cancun simply because the majority of students the year before did.
Cancun’s continued popularity as a spring break destination may indeed be just, but its popularity is most likely the cause of an information cascade.