Facebook copped a lot of backlash from the Cambridge Analytica scandal last year.
Cambridge Analytica collected data from millions of users from their Facebook profiles without their consent and then used it to target political ads.
But what probably made the scandal a pivotal moment was that it was then that people realised that social media could have the power to influence their decisions.
What’s even of more interest to me is how these tactics can affect our economic behaviour. Can social media companies tap into people’s unconscious and influence consumers actions? Can they do it on a large scale?
With 2.41 billion monthly active users, Facebook is a great place to conduct experiments. So for a week in January 2012, that’s exactly what Facebook, together with Cornell University, did.
The goal of their experiment was to see if emotions could spread through online social networks, without people realising it.
So they tweaked the news feed algorithm — the place where people usually see their friend’s updates on Facebook — of close to 700,000 people to run two parallel experiments.
For one group, they reduced exposure to positive content. For the other group, they reduced exposure to negative content. What they found was that people exposed to less positive content were more negative when posting later and the same vice versa.
In short, they showed that our friends emotions on Facebook could influence our own emotions. Something they called ‘emotional contagion’.
It was big, because as Cornell explained, it was the first time an experiment suggested people could spread emotions online. That is, that to spread emotion we don’t need to be face to face and in the real world.
The study (of course) later got into hot water. Had they gotten permission from each participant? Was it funded by the army? An earlier post of the study on Cornell’s website mentioned that it had received funding by the Army Research Office.
But it’s interesting because, after all, economics is the collective decisions of how society uses its resources.
Economics and markets can be emotional. And investor’s collective emotions can definitely influence mood. A bullish mood can take stock markets to new highs, a bearish mood can produce a sell-off.
If central banks are inciting more spending through low interest rates, can emotional contagion have an effect on our spending? It’s not a ridiculous question to ask.
But this is also interesting for tech companies like Facebook. They are in the business of advertising, and advertising is all about creating emotion.
At the end of the day, Facebook and Google make their money through personalised and targeted advertising. And this is a race to know what you like, but also to predict what you will do next.
Anyway, the reason why I bring all this up is this:
‘Facebook buys ‘mind-reading wristband’ firm CTRL-Labs’, the BBC reports this week.
The non-invasive device can pick up electric signals from our brains and translate them into digital signals to send commands to a computer. The device captures your intention. That is, if you intend to send a photo to a friend, the device will pick that up.
CTRL-Labs CEO, Thomas Reardon gave a talk on the device last year. During the presentation, the demonstrator wearing the device played the video game Asteroids without even touching the computer.
It’s pretty incredible.
My question is, would you trust Facebook with your brain?
Before you give me a resounding ‘no’, let me tell you, Reardon makes a compelling case during the presentation for the device.
Our current devices (computers, phones) are much slower than our brains. Think about how quickly we can read and take in information but how much time it takes you to produce something, like write a message or an email.
Elon Musk has been complaining about it too.
As he told Vanity Fair a couple years ago:
‘We’re already cyborgs. Your phone and your computer are extensions of you, but the interface is through finger movements or speech, which are very slow.’
His solution? To create a faster connection by connecting computers directly to the brain. It’s why he purchased Neuralink.
We already carry a computer everywhere, or wear devices that monitor our sleep or track our heart rate. So, with the right time-saving device, Facebook at some point may tempt you to allow them to tap into your brain.
It’s not all about just getting your data anymore. The trend is moving towards a new wave of influence marketing. It’s about tracking our interest but also about predicting what you are going to do before you do it. And this could leave us more open to subtle influencing.
I like to think that we are not that easy to manipulate, that we still have power to make our own decisions.
But my point really is that for investors, this becomes quite dangerous. This trend to personalise and customise narrows our view of the world. It makes it increasingly difficult to get exposed to different ideas than our own.
And it may also make it easier to get swept away from emotions.
Editor, The Rum Rebellion
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