Wednesday, January 30, 2013

247 BILLION HAMBURGERS




McDonald's used a series of billboards to display how many hamburgers had been sold. This is a good example of how the bandwagon effect can be initiated. The bandwagon effect refers to people doing certain things because other people are doing them. The effect is used to create an illusion of popularity of a product and in turn this popularity has an effect on how the object is viewed as a whole. In this case potential consumers will see that billions of people have already bought the hamburgers and so infer that the product must be worth buying, making it more likely that they will ‘get on the bandwagon’ and buy it too.

When individuals make rational choices based on the information they receive from others it has been proposed that information cascades can quickly form in which people decide to ignore their personal information signals and follow the behaviour of others (Bikhchandani et al., 1992).  We have an innate desire to be part of the majority group and tend to change our perceptions, opinions and behaviours in ways that are consistent with group norms. We use others’ behaviour as a guide in establishing the choices and decisions we make. The classic study by Asch (1951) demonstrates this. Participants were asked to match one of three lines with a standard line. All participants except one were confederates and gave the wrong answer in three-quarters of the trials. Conformity rates were high – on average people conformed one third of the time despite the answer being obviously wrong.

Conformity is also affected by the size of a group. Milgram et al. (1969) demonstrated the power of a larger group. If one individual stops and stares at the sky on a busy street, 4% of passers-by would stop as well and 40% would look at the sky. However if 15 confederates stopped to look at the sky 40% of passers-by would stop and 90% would look at the sky. This indicates that as the size of the stimulus crowd was increased there was a greater proportion of conformity of behaviour.  Informing potential consumers that billions of burgers are being sold is a tactic to increase the social validation of the product in the mind of the buyer.

Asch, S. E. (1951). Effects of group pressure upon the modification and distortion of judgment. In H. Guetzkow (ed.) Groups, leadership and men. Pittsburgh, PA: Carnegie Press. 

Bikhchandani , S., Hirshleifer, D, & Welch, Ivo (1992). A theory of fads, fashion, custom and cultural change as information cascades. Journal of political economy, 100, 992 – 1026.

Milgram, S., Bickman, L. & Berkowitz, L. (1969). Note on the drawing power of crowds of different size. Journal of personality and social psychology, 13, 79-82. 

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