Facebook, the Quant Fund Meltdown, and the Techmeme Leaderboard

When a system provides powerful feedback mechanisms for herd behavior, it can actually undermine the “wisdom of crowds” rather than enhancing it.
… when a group of seemingly independent actors are making decisions based on the same limited pool of information, they become more highly correlated, and thus “stupider.”
… the surest way to stay up on the leaderboard is to make sure to comment on stories that are currently appearing on the front page of techmeme! This is a self-reinforcing system, where all of the major tech blogs end up covering the same stories.


(abt. im seminar)