Social Contagion theory

[Nat Wilcox]

do remember that those of us who are experimental economists, like myself, create situations for study in the lab that precisely match the specific instantiation of a theory that we wish to study except of course that the actors are real humans and not the idealized reasonable agents of the theory.

So for instance, we could create a situation where the "truth" is "nonstationary" in which case reasonable solutions to the problem would involve putting greater weight on more recent observations.

What is "correct" of course depends on the true underlying stochastic processes that govern the true state and generate private signals. But that is simply to say that one can create various versions of the inference situation specified in the information cascade story, not that the specific story is deductively flawed. It would be deductively flawed if it didn't follow logically from its own assumptions--but it does. Put in different assumptions about the underlying stochastic process governing the truth and/or the generation of private signals, and the same Bayesian reasoning will produce different recommendations about decisions--possibly not resulting in the phenomenon we call an information cascade. But that doesn't "disprove the information cascade story." It merely means that under different assumptions about the underlying processes, cascades shouldn't occur. And that becomes a useful observation for testing the theory in a laboratory (for obvious reasons).

[Dominique R. Poirier]

Nat,
Once more, regretfully, there is something in your way of tackling the matter at hand, which, for the record, shifted to information cascade.

Actually, what worries me is that you seem to be quick at challenging or questioning many research’s tools and approaches that countless renowned scientist have largely put to the test; successfully put to the test.

I willingly agree that the general and fast paced evolution of science sometimes obliges us to reconsider certain approaches or even certain branches of science in their entirety. Some wonder, as striking example, whether our conception of mathematics fits the study of origin of the universe; what we use to call the “Big Bang,” in other words. The reputed physicist Stephen Hawking attempted to envisage a reversibility of time in an attempt to model his theory of the "Big Crunch."

So long, so good.

But, in my own opinion, it would be unwise to deduce from the aforesaid example and numerous others that we should be ready to challenge any of our landmarks each time we attempt to arrive at a solution. Stephen Hawking attempted to challenge only one of those landmarks; no more. He did it because he was probing into a hypothesis that might allow us to know whether the universe will be in endless expansion or not and to investigate the problem of the “missing matter.” And he just failed! Time is not reversible, and purely rational consideration helped him and us to understand why.

I hope this example will help you understand how your answer surprises me.
I may subscribe to your efforts to demonstrate the possible validity or interest of a new approach to tackle a specific problem. They are laudable, if not courageous. But your readiness at challenging or questioning any previous scientific approach that crosses the path of your will cannot but disturbs me at some point.

For the record, the theory of game of strategy may be described as a mathematical theory of decision making by participants in a competitive environment. In a typical problem to which the theory is applicable, each participant can bring some influence to bear upon the outcome of a certain event; no single participant by himself nor chance alone can determine the outcome completely. The theory is then concerned with the problem of choosing an optimal course of action which takes into account the possible actions of the participants and the chance events.

In my previous attempt to rationalize or abstract your problem of information cascade, I could reduce thing to a dilemma in which "P3" (i.e. the person 3) could set up a matrix payoff in an attempt to find the right solution. But since the way you introduce things says that P3 doesn’t know that he might be eaten by a bear, then there is no significant threat factor in all this to make it a game likely to solve other similar problems.

Like most branches of mathematics, game theory has its roots in certain problems abstracted from life situations. The situations are those which involve the necessity of making decisions when the outcomes will be affected by two or more decision-makers. Typically the decision-makers’ preferences are not in agreement with each other. In short, game theory deals with decisions in conflict situations.

A key word in what I have just said is abstracted. It implies that only the essential aspects of a situation are discussed in game theory rather than the entire situation with its peculiarities, ambiguities, and subtleties.
If, however, the game theoretician is asked “What are the essential aspects of decision in conflict situations?” his only honest answer can be “Those which I have abstracted.”
To claim more would be similar to maintaining that the essential aspect of all circular objects, or example, is their circularity.

As example justifying my concern you question no less than the whole field of game theory when you begin your answer by:

“In the formal theory of games, there is no inherent restriction of the payoff functions (or goals, or values) of the players to be in strict conflict (e.g. if I win you lose). What constitutes a game from the perspective of the general theory is much less restrictive than that. There can be identity of interests; there can be a mixture of conflict and identity; and there need be no relationship at all of interests or values per se.”

In other words, my critics are that if you do not abstract the payoff functions and attempt instead to introduce notions such as "identity of interests", or "mixture of conflict and interest " in a matrix payoff, then I forecast great difficulties in your endeavor to help others in the frame of such questions.

What I am saying prevails in game theory on a general basis, but, as I previously explained it, game theory will hardly applies to your example of information cascade as long as you do not introduce the presence of at least two notional players who send messages.

While quitting the subject of game theory you say then:

“Are there other bodies of theory about similar phenomena that deny one or more of these assumptions? Yes, of course. But, denying any of those assumptions is also an assumption. Since these are assumptions about individual cognition and beliefs--not the kind of thing we can inspect by checking tatoos on people's forheads--in what sense is it helpful to point out that one theory depends on assumptions that are difficult to verify? That is true of any theory that is about cognition and/or beliefs.

I personally think that it is a pretty sterile exercise to argue a priori about whether people are in general reasonable or believe that each other are so, and hence pretty pointless to try to rule in or out any bodies of theory on that basis. From the practical viewpoint of this community of applied science, different theoretical viewpoints will prove to be the best descriptive ones in different situations--I have no doubt of this. Only fools would not avail themselves of every theoretical framework (that is empirically supported) they can get their hands on. So if (say) Marct has an anthropological perspective on herd behavior that is "nonreasonable," I welcome this and hope everyone here does.”

From these two paragraphs on, you leave the object of our reflection to engage into considerations relevant to epistemology, this in order, seemingly, to make tabula rasa of any scientific landmarks we might use in the frame of your concern: information cascade. Thus your speech evolves distinctly toward philosophy until the end of your answer.

In the end you simply besiege rationality.

“Finally, I think that another way of appreciating models based on "reasonableness" (a term I like much better than "rationality") is that it is a formal way of practicing the anthropologists' principle of sympathy or charity, in which the observing social scientist tries to understand how actors' behavior is reasonable or sensible from their own viewpoint (I would be interested in what the anthro folks here think about this...it is an idea I have had for awhile but I do not claim it is original or that it is clearly correct). Is it the only way? Surely not; but it is one way. Can we always achieve a full rational reconstruction? No, surely not; but trying helps us see (what could be) the method in other people's madness. If we are contemplating interventions into individual behavior or social processes, it is helpful to know that as a precaution: We don't want to inadvertently make things worse from actors' own subjective perspectives of what they are doing and why they are doing it. So it is helpful to know what sense and reason there might be in what they are doing. Does that make some sense?”

Nat, how in the hell do you want to scientifically and rationally solution a problem and thus help others in their endeavors, if, instead, you drive them toward doubt? It just happens that several scientific and other disciplines provide satisfactory answers to your problem of information cascade, as I demonstrated it in my previous comment. Thus we obtained the answer we were expecting or, at least, we knew which branches and specialties were likely to solve this kind of problem.

With regards to your education, works, and proessional experience, as scientist your role is to provide answers; not questions…

[Nat Wilcox]

where in any of my posts have I been "challenging or questioning any previous scientific approach that crosses [my] path?" I think you are reading something into my posts that isn't there. My main point is to contribute to this discussion by pointing out the existence of an alternative body of theory that seems to apply to behavior under consideration here. That body of theory emphasizes inferences about others' information, revealed by their decisions, as a source of herding and mimetic behavior. The simplest of the stories does only that. Fancying up the story to cover other phenomena is simple to do; but that is not the point of relating the simplest version.

Not all games are matrix games; some are sequential games, best represented as decision trees. Your implicit idea that all games must be simultaneous move (matrix) games in which "both players send messages" is simply incorrect.

And there was no place in my original discussion of the sequential decision situation where I didn't imagine that person 3 (and indeed all persons in the situation) has a goal. All have a decision to make; decisions implicitly imply the presence of goals, or payoff functions in the language of games. In the case we have in this situation, the specific simple one that produces the cascade, the goals are common and independent. But, that is a simplifying assumption for the purpose of making the logic of information inference from decisions simple and clear: If you look at some of the literature I linked, there are fancier versions of the same story with interdependent payoffs, and then experiments that test those.

Dominique, I would have no trouble at all writing the basic story out as an extensive form (tree structure, rather than matrix structure) game, with everyone's (common and independent and so boringly simple) goals mathematically specified (as payoff functions), their strategy sets written down (again very simple--choose X or Y) and all of the Bayesian reasoning laid out. But to what purpose? Parading my expertise at this sort of thing? Instead, I have chosen to link sources.

But let's get down to brass tacks, rather than talking about quantum mechanics and information-processing. I linked a paper in my last post that summarizes a number of experiments that test the sequential Bayesian reasoning, from observed decisions of past actors who have private information, that lies behind both the simplest version of the situation--the one that produces the classical cascade phenomenon--as well as many other situations. Some of that evidence supports the basic sequential Bayesian reasoning story of the theory; but not perfectly of course. It gets some basic patterns in the data right, but there are some oddities that don't fit. In this respect, I have been very open about the evidential base here.

You say that I am challenging some other theory (I don't think so...) but if you would care to link to the body of evidence that supports the theories you say I am challenging, then I would be delighted to look at it. When I say evidence, I do not mean using theory to "post-dict", that is to explain what has already occurred; I mean when it is used to predict what will happen in a new situation, and that new situation is actually created for the purpose of checking the predictions. So for instance, I view using any social science theory to explain historical patterns as nice and suggestive, but it is not a test. It is just too easy to come up with theories that post-dict; this is something that is very clear to me. What is impressive about theory is when it makes new predictions for a situation we have not yet seen, and then we create that situation, and the theory gets the basic patterns of observations right--and especially better than alternative theories. You say you have "demonstrated" that some other theories explain the phenomena better, but in my book a demonstration involves citing some body of evidence of the sort I have just described (and cited myself).

Finally, Dominique, you say that "as scientist your role is to provide answers; not questions…" You are welcome to your own ideas about the role of scientists. But they are your ideas. I stand by the following assertions:

1. I provided this community with a description of a theoretical perspective on herding that emphasizes the role of inference of private information from actions. That in no way denigrates the contributions of other theoretical perspectives. Nothing I have said here can sensibly be construed as doing so.

2. I provided links where readers could go to see the formal theory itself...at least people capable of looking at bibliographies. I did that in lieu of laying out the theory here, which, I believed, would be off-putting to the vast majority of the members of this community. Instead, I opted to tell the gist of it in simple terms. At any rate, I provided the theoretical answers.

3. I provided links to the evidential basis in support of that theory. It shows both successes and failures of the theory. In this sense, I provided answers--and I might add very honest ones.

4. Anyone here who is in doubt of my ability to formally analyze a game, or my knowledge of games, can check my website, e.g. for instance:

http://www.class.uh.edu/econ/faculty...ilcox_2006.pdf

http://www.class.uh.edu/econ/faculty...nferred_RW.pdf

5. Having spent a lifetime doing experiments about decisions, learning and beliefs in social situations, I have to comment that anyone who believes that honest empirical inquiry doesn't regular throw up as many questions as it answers hasn't spent a lifetime doing experiments about humans (or for that matter animal) behavior. Honest empiricists honestly state those questions and problems. If Dominique or anyone else here knows of any theory (about human or animal behavior) that is perfectly supported by all rigorous evidence of the sort I described above, I'll eat my hat.

[Rob Thornton]

In the Small Group today during a discussion of leadership, the question arose of why is it that some populations do not devolve into the type of contagious violence we discussed on this thread during times of great social stress? We had the value of some diverse educational backgrounds amongst the group who brought up some of the studies that had explored how social cultural norms are altered through environmental erosion such as the Lucifer Effect.

I thought of this thread we started and wanted to come back to it to see what some of our council members thought about social disintegration.

We also discussed how the presence of towering leader during periods where violence might be seen as means to an end, or as something akin to justice, was able to capture the will of the affected people and lead them to a more peaceful solution or benign redress. The question of what it took to compel a population through reasoning, respect and personal example where the environment laid out conditions that in the absence of leadership should have led to violence seems to be important to understanding social collapse. Also interesting was what formed those leaders and provided them the stature to lead a population that might otherwise have unraveled?

Thoughts?

Regards, Rob

[goesh]

What popped into my mind was the situation of the Japanese in America being put in camps during WW2. Talk about grounds for being upset and resisting, but they went quite passively for the most part. Would a linear, monotheistic cultural backdrop have produced resistance and even violence in response to the internment as opposed to their Shinto/Buddhist type circular origins? I don't know but it is a distinctive variable yet contrast it with Martin Luther King and Ghandi, both men of God, one essentially linear and the other essentially ciruclar and nothing is clear cut. The spiritual and magical can't be factored out, that's for sure. I've often pondered 1st contact situtations in remote regions where some have been killed, others not and again the linear and circular variables come to mind. I lean more away from the leadership aspects. Many Indians were quite receptive to Christian Missionaries in the very early frontier days because they wore a cross, symbol of the 4 seasons and 4 directions, which was important in their religion(s).

[Steve Blair]

Actually I don't think there was much fuss when the British interred Germans in Word War I or Italians at the start of World War II. In many cases I think society and socialization plays a major role.