WOULD GOOD BECOME BETTER? AN EMPIRICAL INVESTIGATION INTO THE HERDING EFFECT IN CHINA ONLINE RETAILING MARKET

Doing what others do, herding behaviour has been shown to exist in various situations. Facing the information asymmetry problems in online shopping, customers are likely to purchase what others have purchased, which would make good retailers even better. However, because of the differences in customer preference and the intrinsic needs to be different from others, customers may not follow other’s decisions. With a panel data set collected from taobao.com, this study empirically examines whether herding effect exists in retailing market and how herding effect varies across product categories if it exists. This study extends the understanding of herding to an e-commerce context. By empirically showing that retailers that have a higher historical sale sell more in the future and this effect differs with different product categories, this study has important managerial implications for both online retailers and e-commerce platforms

Consumer Herding Behavior in Online Buying: A Literature Review

The purpose of this review paper is to present the application of herding behavior in online buying. The simplest description of herding behavior is the imitation of others in making decisions. Online buying platforms have facilitated observing others' buying behavior, thereby increasing possibilities of social influence on our information search, evaluation, and buying. The concept of herding is multi-disciplinary; however, the literature review on herding behavior is mainly grounded in economics and finance. There is little understanding of herding behavior in marketing literature. Therefore, this study covers herding behavior literature through high-quality research papers published from 2000 to 2020 in journals indexed in the social science citation index, science citation index expanded, and emerging source citation index. This paper discusses the conceptualization of herding in online buying, herding situations, information-processing view of herding, measuring herding effect, herding models and theories, and areas for future research to enrich herding literature in online buying. This paper proposes a herding model (HCMMD) based on the stimulus-organism-response (SOR) theory to study herding behavio