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Herd behavior (Definition)

Herd behavior

This effect is evident when people do what others are doing instead of using their own information or making independent decisions. The idea of herding has a long history in philosophy and crowd psychology.

Herd Behaviour (Attention !)

It is particularly relevant in the domain of finance, where it has been discussed in relation to the collective irrationality of investors, including stock market bubbles (Banerjee, 1992). In other areas of decision making, such as politics, science, and popular culture, herd behavior is sometimes referred to as "information cascades" (Bikhchandi, Hirschleifer, & Welch, 1992).