What does she know about mass psychology?

I believe that the "she" in your question is referring to the author of "The Lottery," Shirley Jackson.  I believe that Jackson understands mass psychology quite well.  For example, she clearly illustrates that deeply ingrained traditions are hard to get rid of.  A tradition can linger within a society no matter how odd or barbaric it is.  Mrs. Adams even comments to Old Man Warner that other towns are no longer doing the lottery, and...

I believe that the "she" in your question is referring to the author of "The Lottery," Shirley Jackson.  I believe that Jackson understands mass psychology quite well.  For example, she clearly illustrates that deeply ingrained traditions are hard to get rid of.  A tradition can linger within a society no matter how odd or barbaric it is.  Mrs. Adams even comments to Old Man Warner that other towns are no longer doing the lottery, and he scoffs at the absurdity of such a statement.  

"They do say," Mr. Adams said to Old Man Warner, who stood next to him, "that over in the north village they're talking of giving up the lottery."

Old Man Warner snorted. "Pack of crazy fools," he said.

That little exchange shows that a few people question the legitimacy of the lottery tradition, but it also shows that the tradition is likely to continue far into the future.  

I also believe that Jackson gets mob mentality correct.  The people in the story stone Tessie Hutchinson to death.  They commit murder.  But because everybody is there and everybody is participating, the group is able to whip themselves into an excited frenzy.  Within that frenzy all morality is thrown out the window, and the people gleefully kill one of their own.  Mrs. Delacroix even goes for a stone so big that she has to use two hands to pick it up and she excitedly encourages others to follow suit. That's fervor.  

Delacroix selected a stone so large she had to pick it up with both hands and turned to Mrs. Dunbar. "Come on," she said. "Hurry up."

The same kind of disregard for life and property happens in real life mobs too.  It always amazes me that after a sports team loses some big game that a city might riot.  People break windows, burn cars, steal stuff, etc.  More than likely all of those people would never think to do such a thing, but the power of the mob causes all logical thought to be suppressed.  That's what Jackson shows in "The Lottery."