Social Media: Behind the Scenes2013 week 10

Online Crowds Fundamentals

context

fundamental structure of society

evolution

sociologyeconomicsmarketingpolitics

Sir Francis Galton (1822-1911)

Sir Francis Galton (1822-1911)

meteorology

statistical correlation

eugenics

questionnairessurveys

proto-geneticist

statisticianforensic

?

?787x

!

1,198 pounds1,197 pounds

Ask a friend

Ask the audience

65%

91%

January 28, 1986

Builds the shuttle

Manages ground support

Builds the shuttle’s fuel tank

Fuel and components

-6%

-5%

-6%

20min

-3%

-3%

-3%

-3%

-12%

end of day

monthslater

James Surowiecki

James Surowiecki

Why the Many Are Smarter Than the Few

and How Collective Wisdom Shapes Business, Economies,

Societies and Nations.

The Wisdom of Crowds

gnition

ordinationoperation

WisdomsCoCoCo

Coordination

Types of crowd wisdom

Coordination

Types of crowd wisdom

How groups of people can form networks of trust without a central system

Cooperation

Types of crowd wisdom

Thinking and information Processing

Cognition

Types of crowd wisdom

Crowd WisdomSine Qua Non

Diversity

Diversity

Each person should have private information even if it's just an eccentric interpretation of the known facts.

Decentralization

Decentralization

People are able to specialize and draw on local knowledge.

Aggregation

Aggregation

Some mechanism exists for turning private judgments into a collective decision.

Independance

Independance

People's opinions aren't determined by the opinions of those around them.

FAILURECrowd Wisdom

Homogeneity

HomogeneityGroupthink

HomogeneityGroupthinka psychological phenomenon that occurs within a group of people, in which the desire for harmony or conformity results in an incorrect decision-making outcome.

HomogeneityGroupthinkLeads to loss of individual creativity, uniqueness and independent thinking. Produces an "illusion of invulnerability" and significantly overrates the the group’s abilities in decision-making, and significantly underrates the abilities of their opponents

HomogeneityGroupthink

Pearl Harbor

HomogeneityGroupthink

Homogeneity

Blinder effect

People tend to only hear the voices of people they agree with and create feedback loops reinforcing homogenity within a group

Silo effect

Homogeneity

Left

Right

Finance

Marketing

Technology

Information cascadeAn information cascade occurswhen people observe the actionsof others and then make the same choice, independently of their own private informations.

Information cascade

• Decisions are made sequentially• Decisions are made rationally based on

the information available to each actor• Each node do not have access to the

information of other nodes• Action space is limited (yes/no/like/...)

Conditions of occurence

Information cascadeAggravating Factors• Low Weak link/Strong link ratio • Homogeneity of information sources • Homogeneity of position within network

Bandwagon effectPeople doing certain things because other people are doing it, regardless of their own beliefs, which they may ignore or override.

The perceived "popularity" of somethingmay have an effect on how it is viewed.

Bandwagon effect

Buzz

Centralization

Division

Emotionality

peer pressure

herd instinct

collective hysteria