Herd behavior in purchasing books online
Introduction
One of the most intriguing social phenomena evoked by advances in information and communication technologies is the vast magnification of the power of crowds. The emergence of the Internet has enabled consumers to form technology-mediated communities through which they can exchange opinions and experiences regarding companies, products, services, and even world events. Additionally, the emerging online economy provides consumers with easy access to numerous choices. Unlike traditional face-to-face (FtF) retail environments, in which products can be seen and touched and customers can consult salespersons, transactions occur in a computer-mediated communication (CMC) environment that provides no opportunities for experiencing a product or for FtF consultation before making a purchase. Influencing consumer choices in a virtual environment is a challenge facing Internet companies.
“When people are free to do as they please, they usually imitate each other” (Hoffer, 1955). This tendency results in herd behavior, where everyone is doing what everyone else is doing (Banerjee, 1992). People often infer information from the actions of others. For example, consumers frequently select popular brands because they believe that popularity indicates better quality. Furthermore, when two restaurants exist beside one another, customers often pick the one with more seats occupied. Similarly, New York Times bestseller can be sold well enough to continue as a bestseller (Bikhchandani, Hirschleifer, & Welch, 1992). Herd behavior describes various social situations in which individuals are strongly influenced by the decisions of others (Asch, 1956). This construct was also widely used by marketing practitioners to induce consumer purchase intentions (Bearden & Etzel, 1982). Adapting this definition (Asch, 1956) to a consumption setting, this investigation defines herd behavior as a change in consumer product evaluations, purchase intentions, or purchase behavior resulting from exposure to the evaluations, intentions, or purchase behaviors of referent others. Previous studies have investigated herd behavior in digital auctions (Dholakia et al., 2002, Stafford et al., 2006) and software downloading, and bid numbers and download counts have been used by consumers to indicate quality (Hanson & Putler, 1996).
Consumers use the evaluations of others as an indicator of product quality while making their decisions (Park & Lessig, 1977). The above situation becomes more obvious in the face of difficult and ambiguous conditions, such as CMC environments. The uncertainty of online retail environments can increase consumer reliance on the opinions of others regarding products. The emergence of the Internet has made it important to understand the potential of online herd behavior in influencing consumer decisions. Although herd behavior has long been studied in traditional retail environments (Lascu & Zinkhan, 1999), influences on online herd behavior are a fairly recent topic of investigation in retail marketing. This study thus is mainly concerned with investigating herd behavior in purchasing books online.
Section snippets
Literature review
Previous studies have demonstrated that people are influenced by others in decision-making (Asch, 1956, Lascu and Zinkhan, 1999). Deutsch and Gerard (1955) distinguished two influence types – normative and informational. Normative influence describes occurrences in which individuals conform to the expectations of others, while informational influence is considered to be the tendency to accept information received from others as an indicator of reality. Since people have no need to conform to
Hypotheses
Research on the effect of store design on consumer purchases indicates that online stores should provide functions that support consumers in product assessments and decision-making, including customer interaction and customized information. Customer interaction enables consumers to access the comments or opinions of other consumers, while customized information can provide sales data and customer preferences.
Furthermore, studies on information source selection have investigated consumer
Examining herd behavior in purchasing books online
This investigation reports four studies conducted to test the herd effects of online book purchasing. The four experiments involved a total of 815 students, including both males and females, from a Taiwanese university. The majority of subjects were between 19 and 28 years old (86%). Fifty percent of the subjects were female, 66% were full-time students and 34% were part-time workers and students. On average, subjects had been using the Internet for 5 years and currently spent approximately 16.5
General discussion and implications
The main goal of this work is to examine herd behavior of online book purchasing to improve understanding of how people make decisions regarding online book purchases. The analytical results showed that sales volume and star ratings of a book influenced subject online book choices. “The recommendations of other consumers” influenced subject choices more than “recommendations of an expert”. Furthermore, book recommendations from recommender system influenced consumer online choices more than
Acknowledgement
I gratefully acknowledge the helpful comments of two anonymous reviewers on an earlier version of the paper.
Yi-Fen Chen is currently an assistant professor in the Department of International Trade at the Chung Yuan Christian University, Chung Li, Taiwan. Her research interests include Internet marketing, consumer behavior, marketing psychology, electronic commerce, and information management.
References (54)
Gender and computer-mediated communication: Group processes in problem solving
Computers in Human Behavior
(2001)- et al.
Auction or agent (or both)? A study of moderators of the herding bias in digital auction
International Journal of Research in Marketing
(2002) - et al.
Measuring product category involvement: A multitrait-multimethod study
Journal of Business Research
(1991) - et al.
Norm extremity and interpersonal influences on consumer conformity
Journal of Business Research
(1995) - et al.
Effect of store design on consumer purchases: An empirical study of on-line bookstores
Information and Management
(2002) - et al.
Preference heterogeneity and coorientation as determinants of perceived informational influence
Journal of Business Research
(1989) - et al.
The influence of online product recommendations on consumers’online choices
Journal of Retailing
(2004) - et al.
Sex differences in purchasing textbooks online
Computers in Human Behavior
(2005) - et al.
Information cascades in the laboratory
American Economic Review
(1997) - et al.
Internet recommendation systems
Journal of Marketing Research
(2000)
The factor structure of source credibility as a function of the speaking situation
Speech Monographys
Studies of independence and conformity: A majority of one against a unanimous majority
Psychological Monographs
A simple model of herd behaviour
Quarterly Journal of Economics
How critical are critical reviews? The box office effects of film critics, star-power and budgets
Journal of Marketing
Reference group influence on product and brand purchase decisions
Journal of Consumer Research
A theory of fads, fashion, custom, and cultural change in informational cascades
Journal of Political Economy
The perils of the imitation age
Harvard Business Review
Determinants of word-of-mouth communications during consumption
In Advances in Consumer Research
Social ties and word-of-mouth referral behavior
Journal of Consumer Research
Frictionless commerce? A comparison of internet and conventional retailers
Management Science
Network externalities in microcomputer software: An econometric analysis of the spreadsheet market
Management Science
Choice book reviews in American history, geography, and area studies: An analysis for 1988–1993
Library Acquisitions: Practice and Theory
Effects of perceived expertise, strength of advice, and enviornmental setting on parental compliance
The Journal of Social Psychology
BLOGS: The new information revolution? Information Management Journal
A study of normative and informational social influences upon individual judgment
Journal of Abnormal Social Psychology
Coveted or overlooked? The psychology of bidding for comparable listings in digital auctions
Marketing Letters
Cited by (233)
Understanding consumer herding behavior in online purchases and its implications for online retailers and marketers
2024, Electronic Commerce Research and ApplicationsRecommend or not: A comparative analysis of customer reviews to uncover factors influencing explicit online recommendation behavior in peer-to-peer accommodation
2024, European Research on Management and Business EconomicsImpact of online information on the pricing and profits of firms with different levels of brand reputation
2024, Information and ManagementEffect of media context on avoidance of skippable pre-roll ads in online video platform: A mental accounting of time perspective
2023, Journal of Business Research
Yi-Fen Chen is currently an assistant professor in the Department of International Trade at the Chung Yuan Christian University, Chung Li, Taiwan. Her research interests include Internet marketing, consumer behavior, marketing psychology, electronic commerce, and information management.