Question

Vera has decided to upgrade the operating system on her new PC. She hears that the new Linux operating system is technologically superior to Windows and substantially lower in price. However, when she asks her friends, it turns out they all use PCs with Windows. They agree that Linux is more appealing but add that they see relatively few copies of Linux on sale at local stores. Vera chooses Windows. Can you explain her decision?

Short answer

The decision taken by Vera reflects the bandwagon effect since even though the Linux operating system is superior to Windows and substantially lower in price, she still chooses Windows over Linux since all her friends are using Windows as their operating system.

Step-by-step solution

Explanation of the answer

Vera’s decision is the result of the bandwagon effect. The bandwagon effect is one of the exceptions to the law of demand. It postulates that the consumptions decisions of people regarding goods and services depend upon the consumption patterns of other individuals rather than the price of such a good or service.

We see here that even though Linux is superior in technology and lower in price, Vera still chooses Windows as the operating system since all her friends use it. Therefore, her decision is based on the bandwagon effect.