Information cascade in online reading
Many technologies like Kindle or iPads are really shifting our reading experiences from a bundle of papers to some taps on the digital screens. Along with this development of information technology, how information itself plays a role in the online reading experiences or choices-making process is really interesting. In the past, when we headed to the bookstores, we would majorly choose the book according to its reviews from other people’s mouths, the back covers of the books, or the authors’ recommendations. However, according to the empirical study conducted by Liu and Zhang in 2014, the informational cascades theory “demonstrates” its ability in explaining how people make e-book choices online. This academic research shows that “a change in the e-book ranking will result in an increase or decrease in user clicks for that e-book”, while the book reviews do not have a great influence on the people’s choice of reading the book. Thus, people usually make their decisions according to the ranks, which is basically the information derived from other people and their choices. According to the herding experiment discussed in class, our habits of having a cascade if there are a lot of people involved and the term of sequential nature both contribute to this result. Since the ranking is calculated by the people’s reviews, the number of clicks, the sold-out number, and a lot of other nontransparent factors, the rankings shown on the website may directly mean “popularity” to many users. Thus, proving by the related data from the study, if Book A ranks higher than Book B, “it sends a strong signal to later customers, and the signal dominates their own information, which can lead to information cascade.” Thus, rather than reading a specific book review and identifying if it’s helpful or spam, users more prefer to see how other people made the choices and make their own choices. From Liu’s and Zhang’s study, we could see that how the information cascades effect plays a role while people make their choice online.
This study is pretty interesting since we all have experience in exploring e-book options through rankings provided by the websites. When I see these rankings, I always think a great number of people are also interested in or already bought this book. Thus, it really intrigues me to click on the link to know more about this book. The study interestingly connects what we had talked about during class to our real-life experiences. For some further implications, it’s not likely to say that the high-ranked books are always bad with their contents and people buy them only due to the information cascades. However, since we mentioned that “all cascades can arise easily based on very little information” in our class, I believe this study can also be a good lesson for the authors and other people working in this industry. This correlation between the people’s choices and the ranking can show them that, before publishing the books, they must not entirely focus on their book contents if they are hoping more people to buy their books. They have to also consider the things like advertisements, marketing strategies, and some interventions relating to the information cascades.
References
Liu, Qihua & Zhang, Liyi. (2014). Information cascades in online reading: An empirical investigation of panel data. Library Hi Tech. 32. 687-705. 10.1108/LHT-06-2014-0052.
Link: https://www.researchgate.net/publication/280172877_Information_cascades_in_online_reading_An_empirical_investigation_of_panel_data