The sudden charge of Apple stock over the past two days due to rumor--yes, it's definitely rumor not fact--about the coming of a iPhone Nano, so soon after the recent iPhone launch is a quick study in swarm intelligence. As the Business2 blog indicates, this is an example of rumor going wild and spreading quickly.
Swarm intelligence, if you haven't heard of it, describes how very simple behaviors can amount to "smart" decision-making through the work of a swarm of individuals. This theory started originally in the study of how swarms of insects, birds, fish and other animals seem to make intelligent decisions with relatively simple brains. For example, how a school of fish know to move rapidly away in a direction of a predator seemingly all at once, or how ants know when it is time to rebuild their nest or send our foraging parties. Each creature is programmed with a few very basic rules of how to function: e.g. if one or more of my neighbors is suddenly turning and moving rapidly in a new direction, I should be too. They count on individual actions, and the propagation of reaction through the swarm.
Swarm intelligence is a form of collective intelligence, but when it hits humans, the complexity grows because of our seemingly greater decision making abilities. Collective intelligence is part of the spark of interest in the social networking side of Web 2.0. Swarm behavior exists in humans at a basic level, but we call it by a variety of other things like herd-instinct, mob behavior, market trends, crowd movement, flow, etc. There is a lot we can learn from this in SN: how folksonomies grow and change, how decision making happens in online groups, what causes idea propagation, etc.
In the iPhone Nano case, I can see several basic elements: recent excited activity, seed idea, association with recent activity, trusted parties doing research, publishing/syndication, amplification, individual and market reaction.
- recent excited activity - Apple released its iPhone, one of the biggest 1st day successes in history, to an eager world
- seed idea - several Apple blogs picked up on an Apple patent for a new use of their touchwheel to dial numbers
- association with recent excitement - the idea could theoretically apply to the iPhone
- trusted parties - Kevin Chang, an analyst in JP Morgan (a well known and trusted investment institution) came across this information
- publishing/syndication - both the blogs and JP Morgan published or posted on this, and the trusted party information got syndicated to news organizations
- amplification - news organizations everywhere jumped on this
- individual reaction - individual investors saw this as good news for Apple in the longer term and started buying stock
- market reaction - the individuals and institutions all around eventually pushed the Apple stock to new heights
This trend is well known by successful spindoctors and public relations organizations, and there is a whole industry of job roles behind it. Again, it sounds Machiavellian and controlling, but it really is how information flows.
In terms of social networks, we need greater understanding of what actually works in an online social environment, which is a different setting and may have different behaviors than live groups of folks.