An English novelist W. Somerset Maugham used to say "If fifty millions people say something foolish, it is still foolish". Herd instinct (or commonly known as social proof) dictates that an individual felt they are behaving correctly if they act the same as other people. The individual confidence level increases with the number of people who follow a certain idea. The more people who display a certain behaviour, the more appropriate this kind of idea is judged by the others. You are on your way to a concert when you stumbled upon a group of people looking up the sky. Without thinking, you looked up too and why? Social proof. During the concert, when the soloist is displaying absolute mastery, some of the audiences begin to clap and the whole room join in including you. Why you asked? Social proof.
Source: https://upload.wikimedia.org/wikipedia/commons/1/1c/Paramore_Concert
An experiment has been conducted by a famous psychologist, Solomon Asch to prove that social proof can eventually warp common sense. A subject is shown a line drawn on a white paper, and just next to it, three lines with a different length labeled as 1,2 and 3, one shorter, one longer another one is the same length as the original one. The subject must indicate which of the following line correspond to the original one. This is a simple task and if the subject is alone in a room, figuring out the task is a piece of cake. However, before the test started, 5 other people entered the room, and what the subject does not know was, all of them were actors. They gave the wrong answer one after another, saying it is number 1 or 2 although it is very clear that the number 3 was the answer. In one third of cases, when the subject's turn to answer, he/she will answer it wrongly to match the other people's responses.
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We might be wondering why do we behave like this? Fifty thousands years ago, following others' responses can gives a tactical advantages. Supposed you were travelling with a group of hunters on one fine afternoon and suddenly they all bolted, what would you do? Will you just stay put trying to figure out whether the creature in front of you is a lion or an animal who looks like lion which you can kill for meat? No, you will run after your friends and anyone who responded differently from the other will exit the gene pool. We are the heirs of those who survived copying others' behaviors and this was rooted deeply inside us.
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Comedy and talk shows is benefited greatly from social proof by inserting canned of laughter at a strategic spots. This is to incites the audience to laugh along with the jokes even though sometimes the joke they made is not funny at all. There are a few situations in which social proof can be useful for us and one of them is when we travel in a foreign country. You do not know which restaurant is good so you decided to follow the locals' behaviour. You ought to choose restaurant with the most people in it rather than less.
Be skeptical if an advertiser promotes their product saying "this is the best product available" just because it is the most popular. A product's popularity does not necessarily equal to its quality. Social proof can be a liability in a certain situations but sometimes, it could be an advantage.
Source: The Art of Thinking Clearly by Rolf Dobelli "If fifty millions people say something foolish, it is still foolish"