Herding Among Retail Shoppers: the Case of Television Shopping Network

Ye Hu (), Kitty Wang, Ming Chen and Sam Hui
Additional contact information
Ye Hu: University of Houston
Kitty Wang: University of Houston
Ming Chen: University of North Carolina at Charlotte
Sam Hui: University of Houston

Customer Needs and Solutions, 2021, vol. 8, issue 1, No 3, 27-40

Abstract: Abstract Herding behavior refers to the behavior of individuals behaving similarly as a group without directions to coordinate. Herding can demonstrate rational characteristics. When consumers believe that others may have private information about a product, they infer unobserved information through other people’s behaviors, thereby engaging in similar actions themselves. While rational herding behavior has been found mostly in high involvement environments such as the financial markets, this paper provides evidence that such behavior may also occur in a comparatively lower involvement environment such as retailing. To demonstrate herding behavior and test shoppers’ rationality in such, the authors employ a unique dataset from a major TV shopping channel. In this setting, information about other buyers’ purchase decisions is only sometimes observed by shoppers. Evidence suggests that herding happens among shoppers and the herding behavior appears to exhibit rationality. The authors find that herding effects (1) are stronger when relative price discount is smaller, (2) are more prominent for a product category with less digitalizable attributes, and (3) appear to happen mainly in the earlier part of a sales pitch when shoppers have less information about a product and are more uncertain about their product valuation.

Keywords: Herding; Moderators of herding; Retailing; TV shopping (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://link.springer.com/10.1007/s40547-020-00111-8 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:custns:v:8:y:2021:i:1:d:10.1007_s40547-020-00111-8

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/40547

DOI: 10.1007/s40547-020-00111-8

Access Statistics for this article

Customer Needs and Solutions is currently edited by Min Ding

More articles in Customer Needs and Solutions from Springer, Institute for Sustainable Innovation and Growth (iSIG)
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().