Starting a Cascade

http://www.usatoday.com/money/advertising/adtrack/2009-05-17-prius-insight-dial_N.htm

In the examples in class, we always assume we can convince a certain amount of people to help spread the cascade. However, in real life, the amount of people to initially convince is often hotly targeted and unknown. The article above is a comparison between Toyota and Honda's new ads for their respective hybrid cars. These ads generally target the same group, touting environmentally friendly gas mileage and a sense of place in the public. This business tactic of cutting into a competitor's initial starting group limits their ability to spread, as the group will be divided between the competitors. If one company experiences no competition at first, they may develop too big of a presence in the general populace, and become very difficult to displace (think Apple's iPod). As the hybrid market is relatively fresh, companies are straining to get the major initial advantage, as it will prove prosperous in the long run.

http://online.wsj.com/article/SB124199018707904593.html

This is an article detailing the same battle between the "green" car manufacturers. However, WSJ having an editorial twist, puts a different spin on the issue of adoption. They claim that in this world, with oil prices having fallen, the economy collapsed, the advertising dollars that toyota and honda are spending will not prove lucrative in the future.

In this game, the cascade will not move from one technology (the gas guzzlers) to another (the hybrids) precisely due to those two factors irrespective of the preferential attachment that honda and toyota hope will happen when one gets an initial advantage. The threshold is set to be too high to change over, and those who have already changed over are changing back!!

Unfortunate no?

This website lists the 10 most useful languages to learn around the world.
http://www.altalang.com/beyond-words/2008/10/27/the-10-most-useful-languages-to-learn/

When examining the most useful languages to learn, the basic foundation of these claims can be traced back to the diffusion model in class. The main idea is that if the majority of your neighbors exhibit a certain behavior and the payoff is greatest for adopting this behavior, then indeed adopt this behavior. This is directly applied to languages. If your payoff of learning a certain language is high, then it would be a good idea to learn this language. This implies, that your neighbors which will give the largest payoff are important. For instance, the most widely used language around the world today in business is english. People all over the world are learning english to do business with powerful predominantly english speaking countries such as the U.S. Therefore, english is a useful language to learn because it is a top three language spoken around the world, and there is a high payoff to learn it for areas such as business.

As we saw in class information cascades can be broken just as easily as they can be started. In this case it seems that the price point of the hybrid cars, gas, and the value a user receives from driving a hybrid could potentially stop up the cascade just as we have all seen fads go in and out of style. In theory the expected value from driving a hybrid car is great and when people began to hear about all these perks they started to rapidly purchase the prius thus a cascade was started. But as people have now been using the cars for sometime new information has hit the market and the cascade can potentially begin to break down. Its a case of whether the partial information that was originally used to start the cascade can out weigh new information or if people will trust the first few opinions like in the urn game

Information has been going around that purchasing hybrid cars does not necessary mean being more environmentally friendly. This is because the costs to the environment of building hybrid cars are much greater than that of a normal car, thus hybrid cars are only green on the long run. Yet, people change their cars very fast especially with all these new models being release now and then. Thus, before the environmental efficiency of the car kicks in, changing the car restarts the entire cycle again. And the latter is a common sight.

This information was spread through the internet and media and given how connected we are today, it shows that people receive and disseminate information very quickly and easily. Thus, it is really easy to break cascades and the cluster of density is very huge and I believe should be very near to one especially in city areas where print and online media are easily and widely accessible.

Therefore cascades are only more applicable towards a smaller and narrower group in today’s context.