Herding and consumer choice under network platform

This paper analyzes how consumers with product price choose between two products of unknown product value on network platform. Before making a decision, the consumer can see an imperfect private signal indicating which product may provide higher product value as well as the historical sales and product prices. We explore the equilibrium choice behavior of arriving consumers and the extent of their learning from the historical sales and price information and how to form herd behavior and equilibrium. Consequently, we characterize inefficient herding .