Information Cascades and the Arab Spring
https://www.economist.com/blogs/democracyinamerica/2011/10/mass-movements
As this article from the Economist describes, information cascades play an important role in many world events. Especially with how interconnected the world is today through technology, information cascades in a localized area can spread like wildfire to other areas of the world.
The article presents one example of information cascades in stock markets and how as the price of a stock rises, traders view this as a signal from previous buyers that the value will continue to rise. A similar case goes for a stock with a falling price. The information cascades in stock markets can lead to highly volatile stocks.
Another example of information cascades is in regime changes and civil unrest, as seen in the Arab Spring. In this case, masses of people make decisions based on their observations of other people’s actions in large demonstrations and protests. These external signals play into the ideas of information cascade and result in sweeping movements like those in the Arab Spring. In the Arab Spring, isolated movements cascade into protests in various countries.
In today’s increasingly connected world, the mass amounts of information can lead to information cascades and more herd behavior. This shows that the ideas of information cascade and network effects will become increasingly relevant as technology spreads.