Friday, July 17, 2009

Of Twitter and the problem of collective (ir)rationality

I am still struggling to understand the worldwide craze over the fairly unspectacular opinions of a 15 year-old Morgan Stanley intern who -- in the best case scenario -- googled his "findings" off an April 2009 ComScore report. But at least this kind of "market research" helps explain why the leading banks were on the brink of bankruptcy just a few month ago.

Almost 20 years ago, Page and Shapiro wrote an excellent book about the paradox of rational decision making by largely uninformed mass publics. This "collective rationality," of course, unfailingly disintegrates every summer when journalists have a hard time finding anything to fill the news hole.