The Middle East and the Groupon effect

By Chrystia Freeland
February 18, 2011

They are being called the Facebook revolutions, but a better term for the uprisings sweeping through the Middle East might be the Groupon effect. That is because one of the most powerful consequences satellite television and the Internet have had for the protest movements is to help them overcome the problem of collective action, in the same way that Groupon has harnessed the Web for retailers.

“It is a question of co-ordinating people’s beliefs,” said Daron Acemoglu, a professor of economics at the Massachusetts Institute of Technology, who, with Matthew Jackson of Stanford University in California, is working on a paper about the effect of social networks on collective action problems.

Protesting against an authoritarian regime is a prime example of this issue, Mr. Acemoglu said, because opponents of a dictator need to know that their views are widely shared and that a sufficient number of their fellow citizens are willing to join them to make opposition worthwhile.

“I need to know if other people agree with me and are willing to act,” he said. “What really stops people who are oppressed by a regime from protesting is the fear that they will be part of an unsuccessful protest. When you are living in these regimes, you have to be extremely afraid of what happens if you participate and the regime doesn’t change.”

That makes publicly protesting an oppressive regime a classic collective action problem: If everyone who wants regime change takes to the streets, the group will achieve its shared goal. But if too few protest, they will fail and be punished. Even if an overwhelming majority wants change, it is smart for individuals to speak out only if enough compatriots do, too.

As protests have spread from Tunisia to Egypt and now to Bahrain, Libya and other parts of the Middle East, the power of television, particularly Al Jazeera, and the Internet to spread information and to help with the practicalities of organizing demonstrations has become readily apparent. Taken together, television, Facebook and Twitter may have been even more powerful in helping to solve the problem of collective action, by giving people unhappy with their governments the confidence that their views are widely shared.

This potential for technology to overcome collective action problems has been taken to the next level in the consumer space by Groupon. The swiftly growing electronic coupon company is built around the retailer’s version of the collective action problem: Offering deep discounts is worthwhile if it attracts enough extra customers so that the retailer can make up in the scale of his sales what he loses because of the lower price.

Groupon has solved that problem by creating sales that only occur if a sufficient number of people sign on. The Groupon technique is particularly powerful because once the tipping point is reached, all the interested shoppers are locked in to participating – your investment in the Groupon coupon is irrevocable from that moment on.

Political activists have not yet figured out an equivalent way of ensuring participation once a sufficient mass of supporters is identified: Even if we all watch television coverage of demonstrations together and express our enthusiasm for the movement online, we have no guarantee our neighbors will take the physical risk of going out in the streets until they actually do so.

Even so, the combination of satellite television and social networking has made it dramatically easier for the disaffected to overcome one of the central obstacles to organizing regime change – letting each individual know what views are shared by enough people to make protesting worthwhile, and relatively safe.

This new power is transformative. As Mr. Acemoglu said: “There have always been many regimes that are unpopular, but it has taken a well-organized civil society to allow that pent-up frustration to find a voice.” Technology is making it much easier for frustrated societies to express their collective anger.

Once that collective action problem is overcome, the act of physically coming together to express a deeply felt emotion can be – as we have seen in Egypt and Tunisia – very powerful. We are social animals who take pleasure in intense, mass experiences: Hence the continued popularity, in this digital age, of sports events and music concerts.

But even though the Groupon effect makes it easier to bring people together to oppose unpopular regimes, it may be harder for new technologies to overcome the “day after” problem.

Regime change is a classic matter of collective action and of a tipping point – if enough of us do not like the government, and if we can find a way to co-ordinate our protests (and, crucially, if the regime lacks the means or the will to fight back), we can topple our oppressive rulers.

Installing a new and better regime is a much tougher project, and one that may not be as easily facilitated by new technologies. Social networks are good ways to discover whether our beliefs are shared and even to lock us in to specific, self-contained acts.

We haven’t yet figured out how to use them to facilitate more complicated, longer-term collective actions that require significant commitment and negotiation.

That is the next challenge for activists: Using the Internet to facilitate social transformation that is more complicated than getting a sufficient mass of people to come out to the streets.

10 comments

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Internet mob rule is extremely dangerous!!

Posted by anthonytung | Report as abusive

AND sometimes people just can’t bear any more for an oppressive regime … which becomes very dangerous in and of itself.

Posted by WBGriffin | Report as abusive

From the Russian revolution to the Orange revolution people have rarely ended up with better government after a popular revolution. Once again Ms. Freeland comes up with savvy analysis. We live in exciting times, full of hope for the future if we can get this right.

Posted by geordie247 | Report as abusive

[...] This post was mentioned on Twitter by Gaith Kawar and Abodalal, Eddie Gallagher. Eddie Gallagher said: The Middle East and the Groupon effect – Reuters Blogs http://reut.rs/eT404e [...]

Why not just turn the electricity off?

Posted by scarr34 | Report as abusive

[...] seriously, what’s with comparing the protests to Groupon?  It makes it sound like some discount internet site in the West played any sort of a significant [...]

“We live in exciting times, full of hope for the future if we can get this right.”
Surely this is western arrogance at it’s worst – these “exciting times” are a hope for the middle east and not the west – whether that is western style “democracy” or a re-emergence of a truly honest Islamic faith it will be decided by the middle east and not the west.

Posted by truthordare | Report as abusive

The “we” I was referring to were the people of the world.

Posted by geordie247 | Report as abusive

Interesting article… it spawns a lot of questions in my mind.

I wonder just how popular the recent mass movements in Egypt and Tunisia actually were; what percentage of the population was not just unsatisfied in a grumbling sort of way, rather so unsatisfied with the current state of affairs that they were willing to roll the dice by taking personal action?

What was the critical mass required for people to achieve change? Was the percentage the same in both countries? How close was the critical mass to 50%?

Consider then a country like Iran with large percentages of the population in direct opposition to each other. If the ability to assemble and loosely coordinate a large group of people who are deeply committed to their position provides moral justification for doing so, how then can one side or the other ever govern effectively?

Consider then a country like America with presidential elections decided by a very small percentage of voters. What would it take for America to implement change?

For example, I wonder what percentage of American citizens believe deeply that the Wall Street profiteers and corporations who benefitted the most from the recent bubble should suffer severe financial consequences and/or put in jail, rather than continue to be treated like economic demigods?

If it is only 50%, would they be morally justified in initiating a internet-coordinated assembly? Even if it was greater than 50%, what critical mass would it take to be effective in a country that ostensibly operates a government of the people, by the people and for the people?

Posted by breezinthru | Report as abusive

“If it is only 50%, would they be morally justified in initiating a internet-coordinated assembly? Even if it was greater than 50%, what critical mass would it take to be effective in a country that ostensibly operates a government of the people, by the people and for the people?”

Well, “breezinthru”, if the rest are not interested, then those who are will decide.

If you don’t know what you want, then I guess anything will do.

Or, if you don’t know where you are going, any road will do.

Get it?

Posted by doctorjay317 | Report as abusive

@doctorjay317

Those who are not interested will of course not have a say in these matters, but what about two very large groups approximately equal in numbers and approximately the same level of zeal?

They could each in turn shut down large portions of our business activity for several weeks to months while actually causing no permanent change.

Is that kind of harmful chaos justified, even if you disagree with the protestors? At some point, the government must restore order.

Posted by breezinthru | Report as abusive

This is actually what Groupon was designed for, before it was called Groupon. See ThePoint.com.

Posted by jelpernw | Report as abusive

[...] since they have been organized in some way or another through the famous social network. However, Chrystina Freeland, editor at Reuters, believes these protests should remind people of Groupon and, I would say, of Le [...]