Webwhompers

The long tail provides a macro-analytic view of collaborative filtering. Cassidy's essay invites us to step back to a macro-analytic view of the long tail itself (i.e., a macro-macro-analytic view of collaborative filtering).

Six Degrees chapter 7 frames this perspective with the notion of collective decisions. In a collective decision, each individual incorporates his perceptions of others into his process of choosing among the options before him. Watts discusses four types of externalities that influence collective decisions:

• Information externalities: Knowing how others have acted under similar circumstances saves me the effort of evaluating all the options "objectively."
  • Example: I am hungry. McDonalds has sold 30 billion Big Macs. They must be OK.
  • Note: We use information externality synonymously with cumulative advantage and rich-get-richer.


• Coercive externalities: Anticipating the impact of my decision on others influences my choice.
  • Example: Everyone is drinking at this party. What will they think of me if I don't drink?
  • Note: If we define coercive externality as "aversion to difference" and homophily as "affinity for similarity" then we have roughly equated these two concepts (as double-negatives of each other). This is worth noting because homophily is otherwise not included in Watts' overview of forces that influence collective decisions.


• Market externalities: As a particular option is chosen by more and more people, that option becomes more and more valuable to all those who have chosen it.
  • Example: In 1970 very few people had fax machines, and so a fax machine was of very limited use. By 1990 many people had fax machines, and that popularity made fax machines exponentially more useful to everyone owning one.
  • Note: Market externalities are important to collaborative filtering, the long tail, and technology standards in general. See below.


• Coordination externalities: I will sacrifice my short-term selfish interests for long-term gains that depend on favors from others, to the extent that (1) I care about the future, and (2) I believe my actions affect the decisions of others.
  • Example: When my friend lends me $10, I will pay him back the next time I see him. I lose $10 when I pay him back but gain more than that in the long run.
  • Note: Coordination externalities are important to scenarios of group behavior such as the tragedy of the commons and the prisoners' dilemma. We will return to these topics later.

Market externalities and collaborative filtering: Market externalities heavily influence the competition among sites that perform collaborative filtering. Niche items in a long-tail marketplace must be stocked by a huge aggregator like Amazon in order for the benefits of collaborative filtering to work. This makes it very difficult for a new collaborative filtering site to challenge established sites like Amazon. Without a critical mass of user, inventory, and preference data, even the best new collaborative filter is useless -- like a fax machine in a world with no other fax machines. Cassidy puts it this way:

Successful long-tail aggregators can be counted on the fingers of one hand and have already established seemingly impregnable positions. Has the New Economy really moved past the familiar “winner take all” dynamic? That depends on whether you’re looking at the long tail—or at who’s wagging it.