The Wisdom of Long Tails Assignment 3! i203 – Social and Organizational Issues of Information 04/23/2008

Assignment 3

Repackaging ‘The Invisible Hand’ In The Wealth of Nations – people in markets pursue their own interests, but in doing so they also promote a public good. More revenue for self means more revenue for the economy overall. Much expansion on this idea since Adam Smith – more generally, when people are allowed to freely and independently act in a market (of some kind), they will generally tend to generate a collective product that is beneficial for all. But, under what assumptions? Stiglitz, some important limitations on the Invisible Hand, things that break markets - externalities of any kind (things that are not included in prices, models) - incomplete information - regulation, IP rights 3

Surowiecki’s Laws of Wisdom Diversity Independence Decentralization Aggregation / Coordination Diversity - so, people need to be ‘right’ as much as they are ‘wrong’ otherwise they’ll collectively skew the wisdom Independence Who sees a problem here? Info. cascades, power, coercion, influence, social psychological biases Decentralization - i.e. we’re not all the same, we have different specialties, POVs Aggregation Who sees a problem here? Is the coordination mechanism value-free? ‘Flat?’ 4

Fiction or Reality? Yes, there are smart and dumb crowds – and there are conditions that lead to each. But will there ever be such a thing as a truly smart crowd?

When The Tail Wags the Web

The 3 Magic Forces ‘Democratizing the Tools of Production’ ‘Democratizing Distribution’ ‘Connecting Supply and Demand’ What’s with that word, ‘democratizing’!?

Demand Curves What is a demand curve? Anderson talked about hits in the head, misses in the tail. Is it really true that hits are less important now? Will misses really overtake hits? Are people really paying attention to the tail? Does it matter? For an economist, the question is whether the people in the tail are growing more important, profitable. But even if those people never sell, never are read, does them being there serve a purpose?

The Pro-Am Is the Pro/Am dichotomy a good one? It’s not that there aren’t experts, still, but you might argue that the thing that divided pros and amateurs in the past wasn’t their skills as much as their access to the tools of production, status, power, authority.

Which Tail? Chris Anderson thinks his blog is in the tail. Hah! IMHO, force #3 is the real key here – connecting supply and demand. What pushes attention down the tail?? What force is really happening here – we’ve democratized in the sense that we’ve shifted the filter from editors to another function (i.e. digg, technorati, etc.) but that filter is still powerful, biased. Here’s where Surowiecki and Anderson speak to each other.

Why free-riding is not necessarily a bad thing (Rafaeli and Raban) • It is better for the group if many members free ride than if they contribute negatively (poor knowledge, unexamined sources, etc.). • Information sought tends to be unique. A free-rider on a substantial portion of exchanges may become an active contributor in a particular question. • Free-riders are virtually invisible in online systems and tend to be ignored. They are not perceived as free-riders. • Connectivity does not mean that everyone who is connected actually has information to contribute. Yet, these free-riders get a unique learning opportunity and can feel part of the community, generating community level positive effects

But what about VERY LARGE groups? World of Music David Gleich, Matt Rasmussen, Leonid Zhukov, and Kevin Lang http://www.stanford.edu/~dgleich/demos/worldofmusic/interact.html