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A Bayesian Model of Panic in Belief

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  • Carter Butts

    (Carnegie Mellon University)

Abstract

One common principle in the study of belief is what has been called the “consensual validation of reality”: the idea that persons in highly inbred social networks alter their beliefs regarding the external world by repeated interaction with each other rather than by direct observation. This notion accounts for phenomena such as panics, in which a substantial number of actors in a given population suddenly converge to (typically unsubstantiated) beliefs. In this paper, a Bayesian conditional probability model will be used to explore the conditions necessary for such outcomes, and alternative results will be likewise documented. Finally, suggestions for operationalization of the Bayesian model in experimental research will be given, along with some implications of the theory for common phenomena such as the propagation of ideas by media sources, organizational rumors, and polarization of group opinion.

Suggested Citation

  • Carter Butts, 1998. "A Bayesian Model of Panic in Belief," Computational and Mathematical Organization Theory, Springer, vol. 4(4), pages 373-404, December.
    • Handle: RePEc:spr:comaot:v:4:y:1998:i:4:d:10.1023_a:1009638514137
    DOI: 10.1023/A:1009638514137
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    References listed on IDEAS

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    1. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
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