Algorithmic content targeting may have been the underlying cause of the Silicon Valley Bank run.
March 31, 2026
Original Paper
Similarity of Information in Games
arXiv · 2603.28190
The Takeaway
The paper argues that when algorithms show everyone the same information, it homogenizes people's beliefs. In coordination games like bank runs, this 'similarity of information' makes it mathematically inevitable that everyone will act in unison, turning minor local risks into systemic collapses.
From the abstract
Algorithmic content targeting homogenizes information, with implications for strategic interactions. For example, this increased homogenization was arguably responsible for the run on the Silicon Valley Bank. We argue that existing measures of similarity are inappropriate for studying games -- especially coordination games -- because they do not discipline agents' conditional beliefs. We propose a class of stochastic orders, Concentration Along the Diagonal (CAD), built on agents' conditional be