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Wednesday, September 15, 2004

The Memos and the Economics of the Blogosphere

This is an important post - I've been travelling and so haven't been able to write for a few days. I mark the memos affair as the day when the big problem (tm) with blogs revealed itself - although it won't be discussed much for a while, when the noise dies down. Incidentally, I also mark it as the moment when blogs jump the shark - aka, when the growth rate begins to decelerate, but that's another story...

What's the big problem? In a word, hyperpolarization: total choice creates total hyperpolarization. I've discussed this before, but let me restate and summarize the argument:

In a world of perfectly efficient (costless) filters, our tendency is to seek reinforcing information (aka which already fits with your beliefs). This is a case of loss aversion run amok (we are more averse to losses than gains). It exacerbates information asymmetry.

Now, the blogosphere is abuzz with the notions of distributed intelligence and truth-telling incentives creating some kind of UltimateMedia machine. Nothing could be further from the truth.

The incentives in the blogosphere aren't to truth tell, they're to gain credibility. Now, credibility may come from truth-telling; but more often than not it comes from agreement, or consensus. Digby summarizes this nicely - it applies to both sides:

"...Here on planet earth even if writers correct their errors, readers pick and choose which versions to believe and continue to battle the arcane details long after everyone else has lost interest, clinging to their own version of reality as if it is a life raft. The "transparency" of the blogosphere is as clear as orange juice with pulp. Nobody gets stuff "right." They just get stuff. Errors are sustained forever. The "collective mind" is schizophrenic. The blogosphere demystifies the craft of journalism all right and turns it into an endless self-referential loop of The Osbornes.

What an nice bizarro blogosphere it is indeed when you just dismiss fully half of it as "moonbats" in order to believe that you have achieved a pure and real set of facts. I'd like to go there. It sounds soothing. What's the URL?

In Sullivan's blogosphere, credibility is granted once everyone (who's anyone) agrees."

This article by Cass Sunstein makes the above points vividly clear (Via Mefi). In it, Sunstein discusses the notion of public spaces (parks, squares, etc) as vital to any kind of mechanisms of discourse. That, I think, is a killer target to aim for: new kinds of public spaces which challenge the massively reinforced information asymmetries the blogosphere helps generate.

The blogosphere is not the ultimate truth-telling mechanism, it isn't the ultimate form of decentralized intelligence. Cognitive bias and costless filtering make it inevitable that blogs create echo chambers, not truth finders. In the real-world, as online, public spaces are what truly alter the dynamics of discourse, by vaporizing search costs not just for new information - but also for new information which is cognitively costly; new information you're simply not motivated to speak to or find in a world of costless filtering.

The tension between these two - hyperpolarization and public spaces - will, I think, tech business models for quite some to come. We can immediately think about one market where the tension is evident: radio. The future of radio as conceived by folks like last.fm is hyperpolarization - everyone in their own tiny radio bubble. Clearly, this is not enough, by itself - a public space is necessary for the market to grow. How will this happen/what will the model be behind it? I'm not sure (at least for radio).

-- umair // 1:54 PM //


Yeah, that's just what the world needs : one big, giant watercooler :-). It's funny that you found Sunstein's article on MeFi, which I think is an example of the open public space full of unexpected encounters that you're talking about.
// Blogger Mahashunyam // 6:13 PM
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