Cultural brain · Norms, Conformity & Legitimacy
Informational Cascades
People copy earlier choosers assuming they knew something; after a few imitators everyone is copying nobody's information, and the cascade is fragile — fads, bubbles and meme stocks share the structure.
An everyday example
A restaurant full because it was full; a stock rising because it was rising.
What it can cost you
Following a crowd that is following a crowd; mistaking a cascade for evidence.
Warning signs
- Everyone is doing it and nobody can say why.
- The reason is that others did.
One thing to do
Ask what the first movers actually knew and whether later movers added information or just numbers.
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