Information cascades can cause many bubbles in markets. However, it is also the reason as to why popular culture is so difficult to predict. In an article found in the NYT Magazine – “Is Justin Timberlake a Product of Cumulative Advantage?” by Duncan J. Watts – this topic was discussed.

It is a very common occurrence for a publishing company or a movie production company to reject a book or movie and later becomes extremely popular. Some predominant examples of this are “Star Wars” and “Harry Potter”. One may wonder why it is so difficult to predict whether a product of culture may become a hit. The practice of predicting success in cultural markets is based on anticipating the number of people who will have a preference for a certain product. Logical reasoning leads to the conclusion that if one were able to replicate a cultural success, then the replication should also become a hit. This reasoning, however, is based on a very important assumption: “when people make decisions about what they like, they do so independently from one another.” However, Watts claims that people hardly ever make decisions independent of others because, especially when it comes to culture, they want to share the experience with other people. For instance, you would most likely only decide to go see a movie if you had friends who want to see it with you. It is this type of human behavior that makes popular culture hits so unpredictable.

As a result of this social behavior, when one subject is more popular than another he is said to have a “cumulative advantage” or the “rich get richer” effect. Thus, when one subject happens to be more popular than other, then the popularity of that subject will increase even more. As a result, at any point in timer, even miniscule differences of popularity among several subjects will become blown up into large differences over time. It is just by chance that the currently popular subjects are hits today. If history were done over, that subject may be just a little bit less popular and would eventually end up as ordinary people rather than the stars they are today.

A web-based experiment was run to study this human behavior. In this experiment, participants were to listen to music, rate, and download them if they choose to do so. This music was always from bands that they had never heard of. The participants were divided into two groups, one that saw only the names of the songs and bands, and another that also saw the number of times the song has been downloaded so far. This second group is used to examine the effect of knowing how other people decide on the songs. With each song starting with zero downloads, this experiment was run.

By reading about the experiment, one may reason that the most popular songs should have the same magnitude of popularity for both cases of the experiment if people make decisions regardless of what other people like. One may also hypothesize that the same songs would become popular every time the experiment was run. However, the result showed that in the case where social influences exist, the popular songs were much more popular than the popular songs in the other case. Also, different songs became popular in the two cases. It was found that the best ranked songs in the experiment only had a 50% success rate of making it to the top 5.

As can be seen from the result of this web-based experiments, it is nearly impossible to predict whether something will become a big hit or unpopular. Publishing companies may try to predict whether a book will become popular. However, as can be seen by “Harry Potter”, who had been rejected by eight publishers before becoming as popular as it is today, information cascades make popular more unpredictable than if people were socially individual entities.

http://www.nytimes.com/2007/04/15/magazine/15wwlnidealab.t.html?_r=4&ref=magazine&pagewanted=all&oref=slogin&oref=slogin&oref=slogin&oref=slogin