A situation where a consumer’s willingness to use an item depends on how many others use it is.

We’ve all seen it before: a crowded restaurant, a busy amusement park, or an overcrowded hotel.

When something is popular and everyone is doing it, we’re more likely to want to do it too.

This same principle applies when making decisions about risk taking – the more people that are willing to take risks in our surroundings, the more likely we are to follow suit.

You may be wondering how this could apply for you as a business owner?

 

Well read on! As a business owner, you are constantly faced with decisions to make.

How much should you invest in marketing? What food items or products do customers want the most?

Which of your employees deserves more attention and praise for their work ethic?

In each decision there is some level of risk involved, but it can be difficult to know how widespread those risks are among your competitors and colleagues.

One way to take that guesswork out of these choices is by looking around at what other people are doing- as any type of information exchange will provide some insight into possible outcomes.

And while this may seem like an unfair assessment when comparing yourself against a competitor’s metrics, remember.

If everyone else is taking high risks then so too shall we! While