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Cash Mobs: The Direct Benefit Effect

In August 2011, Christopher M. Smith came up with the idea of a cash mob. A cash mob is an organized movement where members of a community agree on a particular time to patronize a chosen small business and spend a specified amount of money, typically $10-20. Word is usually spread through social media sites like Twitter and Facebook. The purpose of a cash mob is to give a boost to a small business that might be particularly beneficial to the local economy or that might be known to give back to the community. Cash mobs are meant to be mutually beneficial to both the members of the community and the small business. Cash mobs began in Buffalo, New York, but have quickly spread around the country. There are now close to one thousand cash mob organizations that target and help small businesses.

Cash mobs epitomize the idea of a direct benefit effect. Individually, members of a community might see little benefit from patronizing a particular local business unless they are seeking the product that that business offers. Without any organization, one individual spending some small amount of money at a small business would not result in much benefit for either party. However, knowing that a large group of people plan on giving business to a small company makes it much more attractive for everyone to patronize the business. Together, a large crowd of people, each spending a small sum of money, can stimulate a small business economically as well as provide it with added publicity that could further improve its outlook. In turn, the customers collectively benefit as well, as helping a local business could improve the local economy and could also lead to that business giving back to the community. Both the consumers and the business owner directly benefit from the collective action orchestrated by cash mobs.

http://www.buffalonews.com/apps/pbcs.dll/article?AID=/20121110/BUSINESS/121119915/1005

http://www.foxbusiness.com/personal-finance/2012/11/01/cash-mobs-flock-to-help-local-businesses/

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