[Question] How large is the harm from info-cascades? [Info-cascade series]

This is a ques­tion in the info-cas­cade ques­tion se­ries. There is a prize pool of up to $800 for an­swers to these ques­tions. See the link above for full back­ground on the prob­lem (in­clud­ing a bibliog­ra­phy) as well as ex­am­ples of re­sponses we’d be es­pe­cially ex­cited to see.

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How can we quan­tify the im­pact (harm) of info-cas­cades?

There are many ways in which info-cas­cades are harm­ful. In­so­far as peo­ple base their de­ci­sions on the cas­caded info, this can re­sult in bad ca­reer choices, mis­taken re­search di­rec­tions, mis­al­lo­ca­tion of grants, a cul­ture that is eas­ier to hi­jack by clev­erly sig­nal­ling out­siders (by sim­ply “join­ing the bub­ble”), and more.

But in or­der to prop­erly al­lo­cate re­sources to work on info-cas­cades we need a bet­ter model of how large the effects are, and how they com­pare with other prob­lems. How can we think about info-cas­cades from a cost-effec­tive­ness per­spec­tive?

We are es­pe­cially in­ter­ested in an­swers to this ques­tion that ul­ti­mately bear on the effec­tive al­tru­ism/​ra­tio­nal­ity com­mu­ni­ties, or analy­ses of other in­sti­tu­tions with in­sights that trans­fer to these com­mu­ni­ties.

As an ex­am­ple step in this di­rec­tion, we built a Guessti­mate model, which is de­scribed in an an­swer be­low.