Bandwagon Effect
- Posted on February 14, 2020
- Financial Terms
- By Glory
What is Bandwagon Effect?
Definition
The Bandwagon effect is a term used when a person or group of people act in a certain way or do something majorly because other people are doing it not necessarily because they want to do it. This happens regardless of the individual’s beliefs or ideologies which the individual willingly let go of in exchange for a different ideology. It may be likened to ‘peer pressure’ considering that a person’s actions are strongly influenced by other people.
Understanding the Bandwagon Effect
The bandwagon is an unconscious occurrence where individuals find themselves reacting in a certain way as a result of the society they dwell in or the circles they find themselves in. For example, during an election, many people unconsciously vote for a particular candidate because that’s where the majority is, not necessarily because they really understand the candidate or his/her motives.
This phenomenon is stirred up by psychological, sociological, and sometimes economic factors as it covers all aspects of life from financial markets to sports and entertainment. In economics, however, the bandwagon effect is used to understand consumer behavior as customers are more likely to purchase a particular product based on the reviews and recommendations of other customers. If more consumers give similar reviews on a particular product or service whether good or bad, then it is very likely to be true.
Tips:
The bandwagon effect is doing something simply because everyone else is doing it.
It is a psychological phenomenon that is stirred up by the society the individual finds themselves.
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