New York times has an interesting article on the power of Gossip today, and how gossip stacks up against facts when it comes to making a decision. Here’s a quick excerpt.

If the first player refused to give the money, he’d save 1.25 Euros, but if others found out about his miserliness they might later withhold money from him. As the game progressed, with the players changing partners frequently and alternating between the donor and recipient roles, the players were given information about their partners’ past decisions.

Sometimes the donor was shown a record of what the partner had done previously while playing the donor role. The more generous this partner had earlier been toward other players, the more likely the donor was to give him something.

Sometimes the donor was shown gossip about the partner from another player. When the partner was paid a compliment like “spendabler spieler!” — generous player! — the donor was more likely to give money. But the donor turned stingy when he saw gossip like “übler geizkragen” — nasty miser.
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But here’s the disconcerting news from the experiment. In a couple of rounds, each donor was given both hard facts and gossip. He was given a record of how his partner had behaved previously as well as some gossip — positive gossip in one round, negative in another.

The donor was told that the source of the gossip didn’t have any extra information beyond what the donor could already see for himself. Yet the gossip, whether positive or negative, still had a big influence on the donors’ decisions, and it didn’t even matter if the source of the gossip had a good reputation himself. On average, cooperation increased by about 20 percent if the gossip was good, and fell by 20 percent if the gossip was negative.

This is an interesting concept in the age where Gossip has gone digital, and social computing is emerging as a valid form of exchanging such tid-bits. I find my actions are consistent with the study. I look at news and data all day, but I really pay attention to personal recommendations or warnings.

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