Exploring Collective Traps and Social Influence in Consumer Choices

Consumers often face a significant cost when they choose not to consume a product, particularly when the product becomes a collective trap. Social influence plays a crucial role in consumer choices as evident from a study on preferences regarding living in a world with or without TikTok or Instagram. The research indicates that individuals' decisions are heavily influenced by their social environment, where the demand for products like platinum credit cards is driven not only by their utility but also by the signaling value to indicate wealth and success. Companies strategically create demand for new and fancier products, leading consumers to feel compelled to make purchases once these products are introduced. This phenomenon is observed in extravagant Indian weddings where the spending on lavish celebrations has turned into a competitive trend. The study highlights that people may not desire the creation of certain products, but once available, they succumb to societal pressures and feel obliged to buy them. The research aims to explore how individuals' choices are shaped by social factors, emphasizing the impact of social influence on consumer behavior.