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Topic: Herd behavior

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	Herd behavior - Wikipedia, the free encyclopedia
		The term is used uncontentiously to describe the behaviour of animals within herds and flocks, and more controversially to describe some kinds of human phenomena such as stock market bubbles, and behaviour in political demonstrations.
		The phrase "herd behaviour" has acquired a certain currency in popular psychology, where the idea of a herding instinct is offered as an explanation of phenomena such as crazes where large numbers of people act in the same way at the same time.
		Here the term "herd behaviour" seems quite inappropriate for the actual behaviour of the group, however, since people are clearly responding to a leader, and their behaviour is often closely co-ordinated with careful delineation of roles.
	en.wikipedia.org /wiki/Herd_behaviour (804 words)

	Encyclopedia: Herd behavior
		Herd behaviour is the term used to describe situations in which the individuals of any particular group react coherently.
		The phrase "herd behaviour" has acquired a certain currency in popular psychology, where it is offered as an explanation of such phenomena and other kind of craze s.
		In this case, clearly the "herd behaviour" is as far from a pack mentality as possible, since it emerges from the unco-ordinated behaviour of self-seeking individuals.
	www.nationmaster.com /encyclopedia/Herd-behavior (372 words)

	Genetics and Behavior during Handling, Restraint, and Herding
		The primary objective of this chapter is to discuss the effects of genetics on the behavior of herding animals during handling and restraint.
		Behaviors studied in the laboratory are clearly shown to be substantially influenced by genetic factors (Plomin, 1990).
		Herd animals usually turn and face a potential threat when it is outside of their flight zone, but when it enters the flight zone the animals turn and move away.
	lamar.colostate.edu /~grandin/references/cattle.during.handling.html (12829 words)

	Taking Your Cues From Alpacas and Llamas
		The cue in this instance, however, is that she would be kushed at all when the entirety of the herd is up and grazing.
		Behavioral cues can mean different things at different times though they should always give us cause to pause and consider the possibilities.
		What is normal behavior for one may be an indicator to explore further in another.
	www.gentlespiritllamas.com /html/articles/cues/cues2.htm (491 words)

	Herd Mentality Takes over in Market Crisis
		"Herd behavior among all institutional investors increased significantly during the Korean economic crisis.
		As for individual investors, the authors find that the herd instinct before the crisis hit was already stronger than among institutional investors -- this did not change that much when the economy soured.
		Of course, herd behavior might not be such a bad thing if, in fact, it could be explained as all investors shrewdly utilizing useful information and pursuing the same winning strategy.
	www.nber.org /digest/jun99/w6968.html (428 words)

	Smith Research Network - Robert H. Smith School of Business - University of Maryland, College Park
		Brown used 742 forecasts by 354 firms across 26 industries between the fourth quarter of 1999 to the third quarter of 2001 to examine the association of a firm’s forecast release decision with the past disclosure decisions of firms in the same industry.
		According to Brown, managerial desire to increase or maintain a company’s reputation is a major contributing factor in the decision to herd in capital expenditure disclosures.
		Herding is a rational behavior, but it can lead to poor decisions if a firm infers the wrong information or follows the bad choices made by others.
	www.rhsmith.umd.edu /research/ras/winter2005/1.html (883 words)

	Rearing and Cross ties (Site not responding. Last check: 2007-10-09)
		The most dominant horse in the herd is called the "alpha individual," and this horse, usually a mare, is responsible for taking care of the herd and leading it to action.
		But in herd behavior, the subordinant horse will rarely go in front of the dominant horse so to keep the horse behind us and beside us, we must keep our leading hand stretched out in front as the most forward boundary that the horse is allowed to cross.
		Watch the horse for this pushy kind of behavior whenever you are leading the horse back to the barn or anywhere that it is eager to go and always enforce this rule that the horse cannot go in front of you.
	www.juliegoodnight.com /QandA/crossties.htm (2065 words)

	NEW YORK STATE 4
		Dominance of a herd member is determined by three factors: age, sex and the absence or presence of horns.
		In domestic herds, herd members are not allowed to interact naturally.
		The herd may attempt to follow you wherever you go and may be in a state of confusion when you are not around.
	www.ansci.cornell.edu /4H/meatgoats/meatgoatfs19.htm (816 words)

	Saving a Dying Corpse by Butler Shaffer
		The institutionally-centered forms with their command-and-control mechanisms that have long represented Western societies are eroding; and the established interests that have benefited from such systems are in a life-and-death struggle to resist their demise.
		While organized behavior is both natural and beneficial to us as social beings, institutions invert the role of social systems: organizations that began as cooperative tools to foster the interests of individuals, get twisted into organizations that become their own reasons for being (i.e., an institution).
		Once men and women have been conditioned to accept the supremacy of institutional interests over their own, it is an easy matter to get them to sanction the use of state power to protect and promote established interests.
	www.lewrockwell.com /shaffer/shaffer112.html (1743 words)

	LEADMARE.COM: Herd Behavior
		Horses are very social animals, and their behavior is what keeps the herd together and maintains the ranking of each member.
		The stallion is the top authority, who locates open places to graze for his herd, finds water, and chooses where to go.
		Second in command is the lead mare (where our site name comes from), who keeps the members of the herd under control, or takes over as the head when the stallion goes off on his own.
	www.leadmare.com /info_center/behavior/herd_behavior.html (421 words)

	Abstract for Cowles Foundation Discussion Paper 1092 (Site not responding. Last check: 2007-10-09)
		Experimental evidence shows that an important reason why people tend to imitate others, to exhibit "herd behavior" is that they assume that the others have information that justifies their actions.
		But these models as specified may be of limited applicability since they assert that differences across groups in herd behavior can be attributed to the random decisions of first movers.
		Differences across groups in herd behavior might be explained more often in terms of different modes of interpersonal information transmission.
	www.econ.yale.edu /cowles/P/ab/a10/a1092.htm (123 words)

	CLOSEMINDED SCIENCE: New Ideas in Science
		It is not just the herd instinct in the individuals that you have to worry about, but you have to worry about how it is augmented by the way in which science is handled.
		It is this tendency for herd behavior that is greatly aggravated by the support structure of science in which we believe nowadays.
		So then when you have a herd, all the money that you spent on it may be wasted, or worse than that, it may actually serve to cement further the bad situation.
	www.amasci.com /freenrg/newidea1.html (4765 words)

	American Professional Practice Association
		There are three overriding behavior tendencies investors face every day: herd mentality, risk aversion and frame of reference.
		Herding reduces the time needed to properly analyze an investment decision. It can also help reduce feelings of regret if the investment choice was a bad one. Investors can find comfort knowing that they were not alone in their decision. Herding can also be a powerful tool in influencing market movements.
		Why such a huge difference? First, investors are attracted to stock funds after the market has risen for a while and they feel comfortable. Much of the ultimate gain has already been achieved by the time they buy. Then when a correction occurs, they become risk averse and sell their investments.
	www.appa-assn.com /newsletter/articles/psychology_of_investing.html (399 words)

	Transmission of Information and Herd Behavior: an Application to Financial Markets
		We propose a model for stochastic formation of opinion clusters, modelled by an evolving network, and herd behaviour to account for the observed fat-tail distribution in returns of financial-price data.
		The only parameter of the model is h, the rate of information dispersion per trade, which is a measure of herding behavior.
		to the "herding behavior" for which traders are famous.
	www.imedea.uib.es /~victor/Bolsa/absBo.html (366 words)

	Herd Behavior and Managers' Decisions (Site not responding. Last check: 2007-10-09)
		In both places it is properly called "herd behavior," and it helps explain why high-level American managers aren't more innovative.
		The herd instinct may become significant when money managers are presented with the choice between undertaking standard activities, which their peers are pursuing, or breaking away from the pack.
		But there is also a slim but terrifying chance that real estate will plummet, the stock market will soar, and the manager will look utterly incompetent, lose his bonus, his raise, and maybe even his job.
	www.gsb.stanford.edu /research/faculty/news_releases/jeffery.zwiebel/zwiebel.htm (744 words)

	SSRN-Herd Behavior in the Japanese Loan Market: Evidence from Bank Panel Data by Hirofumi Uchida, Ryuichi Nakagawa
		Consistent herding during the entire sample period is observed among regional banks, whereas city banks had been following a cyclical pattern of herding with one of the peaks around the bubble period in the late 1980s.
		Even after adjusting for herding resulting from rational behavior, we still observe herding for regional banks during most of the period, whereas herding was practiced only in the bubble period by city banks.
		The results imply that irrational bank behavior in the late 1980s might have contributed to the problems associated with bad loans.
	papers.ssrn.com /sol3/papers.cfm?abstract_id=721346 (300 words)

	Julie Goodnight Questions and Answers (Site not responding. Last check: 2007-10-09)
		A good herd leader will establish his/her authority and then leave the other horses alone, only discipline them if they are disrespectful or disobedient.
		By now, the herd hierarchy should have straightened out and he should be treating the mares better.
		If his aggressive behavior continues, you may want to consider the use of an electric shock collar called "Vice Breaker." It is only used in cases where it is in the horse's best interested to eliminate the unacceptable behavior, which in this case is aggressiveness.
	www.juliegoodnight.com /questions.php?id=54 (572 words)

	Herd Behavior and Investment: Comment - Marco, Srensen (ResearchIndex) (Site not responding. Last check: 2007-10-09)
		Herding arises from the interaction of these two channels affecting the expected payoff, be it physical or reputational.
		Positive differential conditional correlation of signals in the reputational model is tantamount to the introduction of positive payoff externalities in the statistical model.
		The fact that differential conditional correlation is not needed for herding is a clear strength of the...
	citeseer.ist.psu.edu /488897.html (213 words)

	Herd Behavior and Aggregate Fluctuations in Financial Markets - Cont, Bouchaud (ResearchIndex)
		Abstract: We present a simple model of a stock market where a random communication structure between agents generically gives rise to heavy tails in the distribution of stock price variations in the form of an exponentially truncated power-law, similar to distributions observed in recent empirical studies of high frequency market data.
		Our model provides a link between two well-known market phenomena: the heavy tails observed in the distribution of stock market returns on one hand and 'herding' behavior...
		Herd behavior and aggregate fluctuations in financial markets.
	citeseer.ist.psu.edu /83627.html (965 words)

	Herd Behavior in Occupational Choice (SMEALSearch) - Pal,Rangaswamy,Giles,Debnath (Site not responding. Last check: 2007-10-09)
		We present a model where cycles in labor supply are a consequence of herd behavior in occupational choice.
		We also present evidence from nearly 150 West German labor markets which supports the herd behavior model of labor supply cycles.
		JEL Code: I21, J24, J44 Keywords: analysis of education, occupational choice, professional labor markets I am grateful to Thomas Weise from the Federal Statistical Oce Ger- many for kindly providing the data analyzed in the empirical part of this paper.
	gunther.smeal.psu.edu /7336.html (215 words)

	Forums - Zoran Gayer against Robert Prechter : on the origin of Waves in Stock Market
		Zoran challenges this in the prior post, since small events or groups seem able to move markets ahead of the herd, and sometimes the herd is not able to turn the market.
		Prechter attempts to answer this by suggesting that the herding instinct may cause a few to react before the herd, but react to the same underlying forces which later sway the rest, or fail to sway the rest.
		Since the herd is so large, naturally it shows up at mathematical values that strongly relate tonatural behavior and in particular the "herd" behavior.
	www.elitetrader.com /vb/showthread.php?threadid=27512 (1567 words)

	Web Herd Behavior
		Dholakia and Soltysinski found that bidders exhibited herd behavior by making multiple bids on some auctions (coveted comparables), and making no bids at auctions for comparable items (overlooked comparables).
		Herd behavior was lower for products where there was more agreement and more objective clues on the value of the products--- Sony Playstations for instance compared to Italian silk ties.
		Herd behavior resulted in consumers paying higher prices than necessary for reasons having no foundation in economic reality.
	wps.aw.com /aw_laudon_ecommerce_1/0,7270,95665-,00.html (175 words)

	Social psychology (Site not responding. Last check: 2007-10-09)
		Social psychology involves the experimental study of social behavior and psychological processes associated with social cognition, social behavior, and groups.
		It can be done using many different sorts of methods, including surveys, naturalistic observation, participant observation, content analyses, controlled experiments, mathematical models, and meta-analyses.
		Psychological hedonism has a fundamental place in most theories of action, most noteably behaviorism, praxeology, and psychosocial theory.
	www.brainyencyclopedia.com /encyclopedia/s/so/social_psychology.html (2495 words)

	Herd behavior and public information, by Pierre Lemieux (Site not responding. Last check: 2007-10-09)
		Cascade theory reconciles herd behavior with the rational-choice approach in the social sciences: it is often rational for an individual to rely on information conveyed by others.
		But there is little evidence that cascade theory applies to "financial bubbles," because prices of financial instruments move to render herd behavior less and less attractive.
		In cascades, individual incentives remain biased towards herd behavior.
	www.pierrelemieux.org /artherd.html (839 words)

	[No title] (Site not responding. Last check: 2007-10-09)
		Archive users may download papers and produce them for their own personal use, but downloading of papers for any other activity, including reposting to other electronic bulletin boards or archives, may not be done without the written consent of the authors.
		This is a prediction of a mean-variance portfolio optimization model with imperfect information, in which investors acquire country-specific expertise at a fixed cost and incur variable reputational costs.
		Simulations based on equity markets data and country credit ratings suggest that herd behavior can induce large capital outflows from emerging markets.
	www.econ.duke.edu /Papers/Abstracts97/abstract.97.26.html (175 words)

	Behavior and Training Links
		Advice on handling and changing the behavior patterns of aggressive horses.
		Tips on desensitation, herd behavior and patience to train a horse to stand for clipping.
		How to give a herd bound horse confidence so that he can be at ease away from the herd.
	www.geocities.com /Heartland/Acres/3042/btrain.html (424 words)

	SSRN-Herd Behavior, the 'Penguin Effect,' and the Suppression of Informational Diffusion: An Analysis of Informational ...
		The interplay of informational externalities and payoff interdependency induces risk-averse and clustering behavior in the technology-adoption process.
		The analysis differs from the herd behavior literature in focusing on how the herd behavior of subsequent users influences the initial adoption decision.
		Moreover, herd behavior in this article stems from each agent's desire to inhibit the revelation of new information that can be used in a way detrimental to her, rather than from each agent's effort to free-ride on information contained in the decisions made by predecessors.
	papers.ssrn.com /sol3/papers.cfm?abstract_id=8725 (247 words)

	Herd behavior and aggregate fluctuations in financial markets
		We present a simple model of a stock market where a random communication structure between agents gives rise to a heavy tails in the distribution of stock price variations in the form of an exponentially truncated power-law, similar to distributions observed in recent empirical studies of high frequency market data.
		Our model provides a link between two well-known market phenomena: the heavy tails observed in the distribution of stock market returns on one hand and 'herding' behavior in financial markets on the other hand.
		"A Simple Model of Herd Behavior," The Quarterly Journal of Economics, MIT Press, vol.
	ideas.repec.org /p/wpa/wuwpfi/9712008.html (699 words)

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