Why an empty restaurant stays empty
Two restaurants, equal food. One has four people inside. By eight o’clock the gap is not four people, it is the whole evening.
Filed by The Archivist 2 min read
Intuition test — answer before you read on
Identical songs were offered in parallel worlds where download counts were visible. What happened?
Correct answer: B
Rankings diverged and did not reproduce between worlds. Visible popularity fed back into choice, so early noise was amplified into a large, stable, and essentially arbitrary difference.
Two comparable places open on the same street. By chance, one collects a few early customers and the other does not. Nothing about the food, the service or the room differs. By the end of the month one is busy every night and the other has closed, and everybody involved will explain the outcome in terms of quality.
What everyone sees
A busy room and a quiet one, and the natural reading that the busy one is better. That reading is not stupid — crowds do sometimes track quality. It is simply not what is happening in the early hours of a new market.
What is actually happening
When you cannot assess quality directly, you use the behaviour of others as evidence. So does everybody else, which means each person’s decision is partly a copy of the decisions before it. Small random differences at the start get amplified by every subsequent arrival. Salganik, Dodds and Watts demonstrated this cleanly with music: identical songs in parallel worlds where downloads were visible ended up with wildly different rankings, and the rankings were not reproducible between worlds.
Why it stays hidden
Because the cascade is invisible from inside it. Each individual made a defensible inference from real evidence — the evidence was simply other people making the same inference. The outcome then looks like a verdict on quality, and everybody, including the owners, treats it as one.
The empty room is not evidence of worse food. It is evidence that nobody has yet been given a reason to walk in, and that absence compounds.
The empty room is not evidence of worse food. It is evidence that nobody has yet been given a reason to walk in, and that absence compounds.
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The empty room is not evidence of worse food. It is evidence that nobody has yet been given a reason to walk in, and that absence compounds.
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Sources & further reading 3
- Salganik, Dodds & Watts, "Experimental Study of Inequality and Unpredictability in an Artificial Cultural Market", Science, 2006
- Bikhchandani, Hirshleifer & Welch, "A Theory of Fads, Fashion, Custom, and Cultural Change as Informational Cascades", 1992
- Banerjee, "A Simple Model of Herd Behavior", Quarterly Journal of Economics, 1992
Cross-references
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