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4 Examples of an Information Cascade

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An information cascade is when an individual changes their behavior based on inferences they make by observing other people. The term implies that a person does something illogical that goes against facts that they know to be true due to a strong social urge to follow a crowd. The following are illustrative examples.

Comedy

A Japanese comedy prank in which a large crowd suddenly appears on a quiet, narrow street running away from something. People caught by this gag typically join the crowd in running away.

Investing

Investors that buy into a stock that they know to be overvalued due to a fear of missing out.

Marketing

Products, services, brands and technologies may see sales suddenly grow very quickly after market penetration reaches a tipping point.

Hundredth Monkey Effect

The hundredth monkey effect is a story, that's probably a myth, about Japanese scientists and a study of macaque monkeys on Koshima island in 1952. The monkeys learned to wash sweet potatoes before eating them. This spread across the island as the monkeys can learn by observing one another. According to the story, when the number of sweet potato washing monkeys hit some critical number, ostensibly one hundred, the practice instantly jumped to other troupes of monkeys on other islands without any contact between the troupes. Although the story is thought to be a legend, it is a useful analogy to how ideas can spread quickly on a global basis once they hit a certain level of acceptance.
Overview: Information Cascade
Type
Definition
When an individual acts on social information gained by observing people.
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Attention Span
Cold Logic
Color Perception
Decision Fatigue
Flow
Authority
Heuristics
Human Condition
Cognitive Biases
Human Error
Cognitive Dissonance
Human Perspective
Human Readable
Human Scale
Hygiene Factors
Language
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Nudge Theory
Critical Thinking
Situational Awareness
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Fear Of Missing Out
Intuition
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Motivation
Reactance
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Trained Incapacity
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