http://www.cato.org/pubs/regulation/regv26n4/v26n4-2.pdf

Given the discussion of information cascades in class and my interest in politics, I came across an article that highlighted the idea of majoritarianism.  In our democratic government, the idea of “majority rules” runs public policy.  So long as this type of ruling continues to exist, information cascades will continue to play a huge role in state intervention.  This way of running public policy proceeds smoothly so long as the cascades have an objective and is based on sufficient scientific evidence however, information cascades are not always “correct”.  At times, poor public policies arise from the state’s decision acknowledging “false” cascades.   

We cannot assume that the election results, bureaucratic processes, and the political decisions meaningfully voice the public opinion.  Public choice economists would largely agree that public policy often does not meaningfully voice the public opinion, especially in the short run. This is due to the actions of special interest groups.  These groups organize to defend a certain interest while taxpayers and consumers are too scattered and unorganized to fight every government intervention.   The small interest groups then exploit these individuals and continue to spread their opinion through an opinion cascade.  Some examples from the past and present are the actions of soft-drink manufacturers financially backing up the drive for Prohibition and nicotine patch manufacturers that have had influence in the anti-smoking cascade.  According to public choice economist, Kuran, “politics consist of controlling society’s choice through manipulation of public opinion”.    

We often assume that majoritarianism always reflects the public’s best interest, but this article has proved otherwise.  The majority of consumers are vulnerable to the concentrated interest of these small interest groups and what began as the opinion of this one group may proliferate as the majority’s opinion.   This is why when these groups have the wrong interest, incorrect cascades can develop followed by bad public policies.   

Herd Beliefs

“If a hundred people believe it, it’s a cult,

if a thousand people believe it, it’s a philosophy,

if a million people believe it, it’s a religion,

if a billion people believe it, it’s the truth.”

http://theuniverseas.com/human-herds