Psychology of Rumor (1902)
French and German social science research on rumor locates the modern scholarly definition of it to the pioneering work of the German William Stern in 1902. Stern experimented on rumor involving a "chain of subjects" who passed a story from "mouth to ear" without the right to repeat or explain it. He found that the story was shortened and changed by the time it reached the end of the chain. His student was another pioneer in the field, Gordon Allport.
The experiment is similar to the children's game Chinese whispers.
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