Our handouts on information cascades showed how, by using a series of observations of other peoples decisions people often come to conclusions about what decision they should make. The handout on network effects then showed how positive externalities also helped to ensure the dominance of a particular strategy. The novel “The Tipping Point” by Malcolm Gladwell shows us a series of different ‘enablers’ who can nearly single-handedly create information cascades and network effects through their actions.

It is easy to understand the power of these people in causing such changes. For example, consider the example of the Maven. If you know that a particular person’s recommendation (signal) is much much more valuable than a typical signal, the probability that you will follow their signal is much higher than a traditional signal. Look at a more personal situation- are you more likely to listen to two or three friends about a car that they like, or your neighbor the mechanic who studies cars fanatically? Clearly the quality of signal plays a role in decision making. The model which we use is by nature very simple, and doesn’t take this effect into account. How could we modify it to do so? The simplest way seems to enable a signal from a strong source (SS) to as multiple normal signals or multiple actions.

How do these influential people arrive at their decisions to begin with? For a few it comes from direct experience, but in many cases, through other information cascades! Your resident Maven might read a half dozen or dozen articles from critics and reviewers before coming to a conclusion. This decision is also more likely to be based on the real payoff, because there is no sequential or dependent aspect to their evaluations. People who are in contact with them are doubtless aware of this, and may follow the maven irregardless of what the more ‘popular’ decision is.

Then again, influential people can cause changes by themselves without the need for other reinforcing actions or signals, or even a basis in fact. Take this article by satirist Maddox. Since posting, over 2.3 Million people have visited the site. It even earned its own Wikipedia Footnote. Orbitz was flooded with thousands of letters, and undoubtedly lost a number of customers (obviously a hard thing to prove given their reticence to divulge information related to the incident, but likely nonetheless) I have no personal experience about whether Orbitz is a spectacular company or a terrible one, but I find myself much less likely to use them in favor of other alternative options. By Gladwell’s model Maddox might most closely resemble a ‘Connector’, with the exception that Maddox neither knows nor cares about the majority of his fans. His influence is well above and beyond his personal level of connections. The larger a persons popularity and/or perceived reliability, the higher their capability to single-handedly cause these information cascades and network effects.