A Randomized Field Experiment to Explore the Impact of Herding Cues as Catalysts for Adoption
https://discovery.ebsco.com/c/u2yil2/viewer/pdf/vfr5b2x2on?proxyApplied=true
This experiment analyzes the effects of herding cues and herding behavior on the adoption of various concepts such as the adoption of technology. As defined by the article, a herding cue “is a lean information signal that an individual receives about the aggregate number of others who have engaged in a behavior.” Herding cues are received as observations about the actions of prior adopters and are used to infer the value of whether to adopt or not. This experiment is influenced by the work of many researchers who have studied herding behavior such as Banerjee and Bikhchandani as well as other researchers specializing in adopting technology, the uncertainty surrounding decision, and more. Before conducting the experiment, the researchers suspected that with a herding cue, individuals would adopt technology sooner than individuals without herding cues. The researchers believed that information cascades were a common mechanism underlying herd behavior, which occurs when individuals ignore their private information in order to follow the observed behaviors. This study was conducted in a University where undergraduate students were encouraged to adopt the cloud-based services provided by Microsoft Office 365 through email. The participants were randomly divided into two groups and one group’s email had the herding cue while the other group did not. The herding cue was presented through a sentence that read: “No. of students currently migrated to Office 365: XXX.” Results from the experiment generally show that the herding cue has a positive significant effect on time of adoption, suggesting that it motivates individuals to adopt earlier.
This study directly applies to Chapter 16: Following the Crowd, where herding and information cascades are introduced and even takes inspiration from Banerjee’s and Bikhchandani’s ideas of herding. The experiment takes ideas from the simple model of decision making with a crowd: 1. There is a decision to be made, 2. People decide sequentially, 3. People have private information, 4. People can observe the decisions made by those who moved previously. The experiment takes these ideas and applies them on a large scale. Although the experiment is not done in a form that has individuals make decisions in front of others, it roughly has the same idea by providing one of the groups of participants with the number of students who have decided to adopt the new technology. The researchers also let individuals form their own opinions and gather private information by bringing the new technology into their attention several weeks prior to the experiment. This experiment is a more complex example of an extremely basic herding experiment containing two urns with either majority red or majority blue marbles where participants sequentially pick a marble and guess the majority color marble of that urn. This basic herding experiment analyzes how herding cues and information cascades affect outcomes. While extremely simple, this basic herding experiment directly relates to the overall messages of the adoption experiment. Both of these experiments prove that basic or complex, analyzing the herding cue provides extremely interesting experiments that bring more attention to what factors may cause social influence.