This paper examines how social media have modified the process through which information spreads within a population. Building on agent‐based modeling and a behavioral survey on information diffusion following a food scare in China (n = 586), we study diffusion networks in simulated populations with and without access to social media. While the use of social media does not increase the likelihood of informational cascades, our results suggest a significant change in the topology of diffusion networks. Social media facilitate the formation of feedback loops through the emergence of multiple links, which can potentially lead to instances of market and social panic.