Elsevier

Computers in Human Behavior

Volume 24, Issue 5, September 2008, Pages 1977-1992
Computers in Human Behavior

Herd behavior in purchasing books online

https://doi.org/10.1016/j.chb.2007.08.004Get rights and content

Abstract

Previous studies on informational cascades have stressed the importance of informational social influences in decision-making. When people use the product evaluations of others to indicate product quality on the Internet, online herd behavior occurs. This work presents four studies examining herd behavior of online book purchasing. The first two studies addressed how two cues frequently found on the Internet, i.e., star ratings and sales volume, influence consumer online product choices. The last two studies investigated the relative effectiveness of different recommendation sources. The experimental results demonstrated that subjects use the product evaluations and choices of others as cues in making purchasing book decisions on the Internet bookstore. Additionally, recommendations of other consumers exerted a greater influence on subject choices than recommendations of an expert. Finally, recommendations from recommender system influenced online consumer choices more than those from website owners. The results and implications of this research are discussed.

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.

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    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.

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