have been really interested in information cascades since we learned about them in lecture, so I thought this might be opportunity to think a little bit more about how they relate to personal experience with restaurant choice.

We know that “in social settings” when individuals can observe the actions of their peers before they act themselves, they tend to alter their behavior accordingly. Even in cases where the individual’s private information disagrees with the choices of the group, it may still be rational for the individual to imitate that group’s choice, however misguided it may be. The restaurant scenario in the textbook is a certainly striking example, but it seems like the individuals private information would have to be fairly weak for the individual to follow the herd. (p.173)

This summer while traveling with my family I had to make a similar choice. In between destinations around dinner time, my family decided to try and find somewhere fun to stop and eat, but without any previous information about the area our best guess would have been to base our decision on the actions of the crowd. Instead, we decided to try a web site called yelp to see if we could find our own private information before making a decision. Created by Jeremy Stoppelman and Russel Simmons a few years ago, Yelp is a review service and social network with reviewers maintaining personal profiles and rating all kinds of businesses and service providers ( restaurants, stores, spas, etc). We decided on a Thai restaurant that had received incredible reviews from the yelp community and exited the highway to find it. We were surprised when we arrived because there were so few people seated inside and we knew that more people must have been eating elsewhere. Judging from the scenario in the text, we might have tried to find that other place with more patrons, but we decided to stay. After a short wait, we had an incredible meal – the yelp reviewers had been right.

I started to wonder about the type of information that comes from an aggregated review site like yelp. Would it be fair to say that my private information was the information of the group (they weren’t in the restaurant, but I read their reviews)? And has this type of site changed the nature of the restaurant example? or have we just found a way to use better information to follow the herd towards the restaurant As of the world? In any case, it seems that the “others” , via yelp, were able to point me towards a great restaurant, and the better choice. 

http://media.www.crcconnection.com/media/storage/paper572/news/2008/03/13/Features/Yelp-Reviews.Local.Businesses-3268761.shtml

http://www.yelp.com/