Network effects…

Johnnie Moore

Johnnie Moore

I’m Johnnie Moore, and I help people work better together

Is Justin Timberlake a Product of Cumulative Advantage?, asks Duncan Watts in the New York Times magazine. His research suggests that market success is hugely affected by a network effect, where people’s preferences are a product of the preferences of others rather than being independent.

He did an experiment in which people were asked to evaluate unknown music tracks under different conditions. Some did this without any information about their peers’ choices. The rest were told what tracks other people were downloading. In the latter circumstances, songs polarised more strongly into popular and unpopular than in the first group. More intriguingly, the second group was subdivided into eight subgroups and each subgroup had quite different favourite songs. Here’s some of Watts’ analysis of this:

The impact of a listener’s own reactions is easily overwhelmed by his or her reactions to others. The song “Lockdown,” by 52metro, for example, ranked 26th out of 48 in quality; yet it was the No. 1 song in one social-influence world, and 40th in another. Overall, a song in the Top 5 in terms of quality had only a 50 percent chance of finishing in the Top 5 of success.

In our artificial market, therefore, social influence played as large a role in determining the market share of successful songs as differences in quality. It’s a simple result to state, but it has a surprisingly deep consequence. Because the long-run success of a song depends so sensitively on the decisions of a few early-arriving individuals, whose choices are subsequently amplified and eventually locked in by the cumulative-advantage process, and because the particular individuals who play this important role are chosen randomly and may make different decisions from one moment to the next, the resulting unpredictably is inherent to the nature of the market. It cannot be eliminated either by accumulating more information — about people or songs — or by developing fancier prediction algorithms, any more than you can repeatedly roll sixes no matter how carefully you try to throw the die.

I was intrigued by Scott Karp’s interpretation of this:

All of a sudden it’s crystal clear what Web 2.0 really is — the greatest platform ever for harnessing randomly imitative social behavior. Before Web 2.0, achieving utterly arbitrary results took time and effort. Now, with platforms like Digg, we can get nowhere in a fraction of the time it used to take.

WOW — I am humbled and awestruck by the power of technology, and the power of randomly socialized human beings to snuff out each others’ critical faculties and personal tastes.

I don’t agree with that interpretation. I think it rests on a certain assumption that our intelligence is individual and not social. Karp appears to regard imitation as a mark of dumbness.

But if you think of the eight sub-communities as forms of collective intelligence, they each come up with distinctive preferences from each other: so at that level, they do not imitate each other… so I wonder if Karp would then admit that these subgroups demonstrate a kind of collective intelligence?

I also suspect there’s a distinction to be drawn between unpredictable and random but my brain hurts too much this morning to try and explore that one. If Dave Snowden‘s listening, maybe he could help?

Big Hat tip to AdPulp for spotting both items.

(There’s lots of interesting comments on Scott’s blog… pity the NYT has missed the chance to host any kind of online discussion, though it does flag an item about colourful men’s underwear)

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