Bandwagon Effect – Definition

Cite this article as:"Bandwagon Effect – Definition," in The Business Professor, updated January 24, 2020, last accessed June 1, 2020, https://thebusinessprofessor.com/lesson/bandwagon-effect-definition/.

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Bandwagon Effect Definition

The bandwagon effect is a psychological theory whereby people exhibit certain habits primarily because others are engaged in the habit. This theory connotes a contagious effect in which people do something only because others are doing it.

In the bandwagon effect, personal beliefs, ideologies and dispositions do not count. Rather, people act based on their belief, they follow the path of others. The bandwagon effect is commonly exhibited by consumers, investors and sometimes politicians. The bandwagon effect has to do with majority support, it is the tendency of people to follow an opinion because it has majority support or buy a product because it is popular.

A Little More on What is the Bandwagon Effect

When the bandwagon effect occurs, people do not think of the implications of their actions, rather, they make decisions based on what they see others doing. The bandwagon effect is common in consumer theory, this is when many consumers purchase a product because others are buying it and not necessarily because they need it.

The bandwagon effect is also obtainable in the political arena, for instance, during an election, citizens can decide to vote in a particular candidate simply because they see others talking about or voting for the candidate.

Desire is a missing factor in the bandwagon effect, people take actions not because they want it but because that is the popular action or decision.

Bandwagon Effect Origin

The bandwagon effect originated in the 19th century, when a wagon is used to transport people during campaigns. At this period, Zachary Taylor was bidding for presidency and Dan Rice, an entertainer traveled the country in a wagon campaigning for the candidate. Seeing the campaign, a lot of people jumped on the wagon, regardless of where Taylor was their desired candidate or not.

Given the bandwagon effect, the campaign recorded a huge success and Zachary Taylor emerged as the president-elect of the United States. In recent times, this social and psychological phenomenon is used to describe the tendency of people to jump on an idea of action, because others are doing the same.

Bandwagon Effect at Work

The bandwagon effect is not limited to politics, it is found in every aspect of life, even in business and investment. For instance, in the bull market, investors have the tendency of following the bandwagon while making investment decisions, this happens when investors use the common market trends to form investment choice rather than carry out a market analysis.

Also, in business, the bandwagon effect happens when startups who do not have a solid business plan follow the most popular business pattern. An example is the dotcom bubble in the 1990s.

Reference for “Bandwagon Effect”

https://www.investopedia.com/terms/b/bandwagon-effect.asp

https://en.wikipedia.org/wiki/Bandwagon_effect

https://www.verywellmind.com › Psychology › Theories › Social Psychology

www.businessdictionary.com/definition/bandwagon-effect.html

https://www.fieldboom.com › Digital Marketing › Conversion › Sales Techniques

Academic research on “Bandwagon Effect”

The bandwagon effect: Swiss hotels’ web-site and e-mail management, Murphy, J., Olaru, D., Schegg, R., & Frey, S. (2003). The bandwagon effect: Swiss hotels’ web-site and e-mail management. The Cornell Hotel and Restaurant Administration Quarterly44(1), 71-87.

A recommendation model using the bandwagon effect for e-marketing purposes in iot, Choi, S. M., Lee, H., Han, Y. S., Man, K. L., & Chong, W. K. (2015). A recommendation model using the bandwagon effect for e-marketing purposes in iot. International Journal of Distributed Sensor Networks11(7), 475163. Recently, the Internet of things (IoT) became useful in various applications based on the web communication technology. The IoT has great potential in several service domains including cultural, educational, or medical areas. We consider a recommendation technique suitable for the IoT-based service. A personalized recommender system often relies on user preferences for better suggestions. We notice that we need a different recommendation approach in the IoT platform. While the conventional recommendation approaches rely on user preferences provided by users, these approaches may not be suitable for the IoT environment. The conventional systems utilize user ratings for items to compose recommendation list. This implies that the systems require additional user activities such as adding their preferences. We notice that the IoT environment can naturally provide user information such as users’ item selection history without users’ additional actions. We propose a recommendation model that does not require users’ additional actions and is more suitable for the IoT environment. We examine the usability of the bandwagon effect to build a new recommender system based on users’ selection history. We first consider the bandwagon effects in movie recommendation domain and show its usefulness for the IoT. We then suggest how to use the bandwagon effect in recommender systems with IoT.

Mimetic entry and bandwagon effect: the rise and decline of international equity joint venture in China, Xia, J., Tan, J., & Tan, D. (2008). Mimetic entry and bandwagon effect: the rise and decline of international equity joint venture in China. Strategic Management Journal29(2), 195-217. The rise and decline of foreign entry strategies in transition economies is an important yet largely overlooked issue in the literature. This study is a step toward filling this gap by examining how mimetic entry within reference groups and the emergence of a competing strategy affect the bandwagon phenomenon of a dominant strategy in the context of China, where international equity joint ventures (EJVs) used to be a dominant entry strategy among foreign firms in the 1990s. Findings from a sample of 1,123 EJVs formed in China’s non‐restricted industries from 1990 to 2003 show that the impact of home and host‐country industry effects are not symmetric between the EJV rise and decline periods. Cross‐border merger and acquisition (M&A) as a competing strategy has an important impact during the EJV decline period but not the rise period. The interactive effects between EJV and M&A strategies occur only in the host‐country industries. We discuss such results and offer suggestions for future research..

When demand accelerates demand: Trailing the bandwagon, Van Herpen, E., Pieters, R., & Zeelenberg, M. (2009). When demand accelerates demand: Trailing the bandwagon. Journal of Consumer Psychology19(3), 302-312. Consumers generally prefer scarce products, which has been related to their exclusiveness. Currently scarce products, however, are not necessarily exclusive, but could be scarce because many other consumers previously bought them. We propose that consumers also prefer scarce products in this situation, which an appeal to uniqueness cannot explain. Three experiments support our predictions and reveal that scarcity effects even occur when consumers only see traces of others’ behavior through emptied shelf space. Furthermore, this bandwagon effect disappears when uniqueness is threatened due to others in close spatial distance.

Bandwagon pressures and interfirm alliances in the global pharmaceutical industry, Pangarkar, N., & Klein, S. (1998). Bandwagon pressures and interfirm alliances in the global pharmaceutical industry. Journal of International Marketing6(2), 54-73. This study examines the applicability of a bandwagon explanation for interfirm alliances in the global pharmaceutical industry. A sample of alliances undertaken by 43 firms, with headquarters in the United States, Europe, and Japan, in the period 1975 to 1989, was analyzed. Bandwagon pressures, measured by the proportion of other firms in one’s peer group undertaking alliances and their average number of alliances, was found to influence both the probability that a firm will undertake at least one alliance and the number of alliances it undertakes.

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