Definition: Bandwagon Effect implies a psychological fact wherein people adopt or do something because most of the people are doing it. In doing so, they keep aside their own beliefs. They do so to become part of the group. It affects an individual’s spending and investing decisions.
Further, this concept tells us how we follow the majority and change our behaviours and styles accordingly. The alternative term for the bandwagon effect is the contagion effect or demonstration effect.
In the bandwagon effect, a consumer buys a commodity because other people are buying it. So, the reason for buying that particular commodity is that it is in trend and it has become the talk of the town. While buying the product, the consumer does not consider the factors like price or whether there is any need for the product.
In short, he ignores his belief system completely. The primary reason for doing so is their desire to stay in fashion.
Suppose your best friend buys an iPhone, and three other friends of your group have an iPhone. You are probably going to be influenced by their purchase, and in the next few months, you, too, will buy an iPhone. This is what we call the bandwagon effect.
The term ‘bandwagon‘ means a fancily decorated wagon, which was used to carry musicians in a parade in earlier times. It encourages people to join the ride and enjoy the music being played. Hearing the music and celebration, more people jump aboard.
In the bandwagon effect, the consumer demand for a commodity is not due to the need. Rather, the demand arises because the consumer is influenced by the taste and preference of the social class which he comes from. That is, such commodities are in fashion.
Hence, the consumer’s desire to look up-to-date and to align with the Joneses makes the demand of the consumers interdependent. So, the factors that trigger the purchase of such commodities include jealousy, equality in the peer group, social inferiority, competition, and the urge to raise social status.
As a result of this effect, the demand curve becomes flatter or, say, more elastic.
Areas affected by the Bandwagon effect
- Technology: We all are fantasized about high-end smart devices. If all the people around us use a specific brand of watch, tablet or mobile phone, we also get that desire to buy it.
- Events: Weddings nowadays have become events than just ceremonies. People spend lakhs of money on the celebration only. When we attend such big fat wedding ceremonies, we too get attracted to them and make all the effort to reach that level. This happens because we want our weddings to be like that. In doing so, we forget about our budget as well.
- Tourism: When our friends and acquaintances go for a vacation to a particular place. The desire to visit that place emerges in our mind too.
- Health: If people are following Intermittent fasting or a Keto diet to reduce weight, then there are possibilities that we will also follow the same diet without giving it a second thought. In fact, if our friends start going to the gym, doing yoga or aerobics, we also join them.
- Fashion: Men and women go with the trend. And so if a certain style is in vogue, they are likely to adopt it.
- Elections: General public always supports the candidate who has a higher chance of winning the elections.
- Music: You might have observed that if a song is on the top 10 charts and wherever you go, you find that particular song is playing. There is a high chance that you will like that song too.
- Career: Career is not untouched by the bandwagon effect. When people see that someone’s daughter and son have chosen a particular career option (like doctor or engineer) and doing really well, they also force their kids to choose a similar field.
Factors Causing the Bandwagon Effect
- Groupthink: We all know that the people who surround us play a great role in determining our choices. Also, it shapes our behaviour. Suppose an individual does not adopt group practices and behaviour, then he/she will face difficulty in socializing. This happens due to pressure.
- The desire for acceptance: Many people have a Fear of Missing Out, i.e. FOMO. They follow the trends because they think that whoever is not following what is trending is uncool. The desire to be accepted in a particular group is one of the determinants that cause the bandwagon effect.
- Ostracism: There are many who suffer the fear of being singled out and criticized or the fear of becoming an outcast; this is ostracism. This happens when someone is afraid that if he does not follow the trends, he will be considered as strange by the group.
A word from Business Jargons
The bandwagon effect is a kind of herd behaviour. To be more precise, the bandwagon effect is a cognitive bias through which the opinion, ideology or behaviour of people changes because of the beliefs persisting among people.