Discover

'Herd behavior' describes how individuals in a group can act together without planned direction. The term pertains to the behavior of animals in herds, flocks, and schools, and to human conduct during activities such as stock market bubbles and crashes, street demonstrations, sporting events, episodes of mob violence and even everyday decision making, judgement and opinion forming.

Contents

Herd behavior in animals

Herd behavior in human societies

Stock market bubbles

Behavior in crowds

Religious and political affiliations

Everyday decision-making

Notes

See also

References

Further reading

Herd behavior in animals

A group of animals fleeing a predator shows the nature of herd behavior. In the often cited article "Geometry For The Selfish Herd," evolutionary biologist W. D. Hamilton said each individual group member reduces the danger to itself by moving as close as possible to the center of the fleeing group. Thus the herd appears to act as a unit in moving together, but its function emerges from the uncoordinated behavior of self-seeking individuals. ^[1]

Herd behavior in human societies

Psychological and economic research has identified herd behavior in humans to explain the phenomena of large numbers of people acting in the same way at the same time. The British surgeon Wilfred Trotter popularized the "herd behavior" phrase in his book, ''Instincts of the Herd in Peace and War'' (1914). In The Theory of the Leisure Class, Thorstein Veblen explained economic behavior in terms of social influences such as "emulation," where some members of a group mimic other members of higher status. In "The Metropolis and Mental Life" (1903), early sociologist George Simmel referred to the "impulse to sociability in man," and sought to describe "the forms of association by which a mere sum of separate individuals are made into a 'society.'" Other social scientists explored behaviors related to herding, such as Freud (crowd psychology), Carl Jung (collective unconscious), and Gustave Le Bon (the popular mind).

Stock market bubbles

Large stock market trends often begin and end with periods of frenzied buying (bubbles) or selling (crashes). Many observers cite these episodes as clear examples of herding behavior that is irrational and driven by emotion -- greed in the bubbles, fear in the crashes. Individual investors join the crowd of others in a rush to get in or out of the market. ^[2]
Some followers of the technical analysis school of investing see the herding behavior of investors as an example of extreme market sentiment.^[3] The academic study of behavioral finance has identified herding in the collective irrationality of investors, particularly the work of Robert Shiller^[4], and Nobel laureates Vernon Smith, Amos Tversky, and Daniel Kahneman.

Behavior in crowds

Crowds that gather on behalf of a grievance can involve herding behavior that turns violent, particularly when confronted by an opposing ethnic or racial group. The New York Draft Riots and Tulsa Race Riot are notorious in U.S. history, but those episodes are dwarfed by the scale of violence and death during the Partition of India. Population exchanges between India and Pakistan brought millions of migrating Hindus and Muslims into close proximity; the ensuing violence produced an estimated death toll of between 200,000 and one million. The idea of a "group mind" or "mob behavior" was put forward by the French social psychologists Gabriel Tarde and Gustav Le Bon.
Sporting events can also produce violent episodes of herd behavior. The most violent single riot in history may be the sixth-century Nika riots in Constantinople, precipitated by partisan factions attending the chariot races. The football hooliganism of the 1980s was a well-publicized, latter-day example of sports violence.

Religious and political affiliations

Followers of certain religious cults and political movements have exhibited herd behavior, often involving a cult of personality. The behavior may be deliberately coordinated to some degree, but each individual follows the group in ways that clearly place health or life in peril -- religious cults of this type include the Peoples Temple in Jonestown, Heaven's Gate, Islam, Christianity, Catholicism, Judaism, and the Branch Davidians during the Waco Siege. In political movements, the dictators Adolf Hitler and Joseph Stalin relied heavily on a cult of personality.

Everyday decision-making

Benign herding behaviors may be frequent in everyday decisions, such as a person on the street deciding which of two restaurants to dine in. Suppose that both look appealing, but both are empty because it is early evening; so at random, this person chooses restaurant A. Soon a couple walks down the same street in search of a place to eat. They see that restaurant A has customers while B is empty, and choose A on the assumption that having customers makes it the better choice. And so on with other passersby into the evening, with restaurant A doing more business that night than B.^[5]

Notes

1. W. D. Hamilton, "Geometry For The Selfish Herd," ''Journal of Theoretical Biology'', Volume 31, Issue 2, pp. 295-311.
2. Markus K. Brunnermeier, Asset ''Pricing under Asymmetric Information: Bubbles, Crashes, Technical Analysis, and Herding'', Oxford University Press (2001).
3. Robert Prechter, ''The Wave Principle of Human Social Behavior'', New Classics Library (1999), pp. 152-153.
4. Robert J. Shiller, ''Irrational Exuberance'', Princeton University Press (2000), pp. 149-153.
5. Abhijit V. Banerjee, "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, Vol. 107, No. 3, pp. 797-817.

See also

★ Anxiety

★ Bandwagon effect

★ Collective behavior

★ Collective consciousness

★ Collective Effervescence

★ Collective intelligence

★ Crowd psychology

★ Conformism

★ Fear

★ Flocking (behavior)

★ Group behavior

★ Groupthink

★ Hive mind

★ Mean world syndrome

★ Meme

★ Mob rule

★ Moral panic

★ Propaganda

★ Self-organization

★ Sheeple

★ Socionomics

★ Spontaneous order

★ Swarm intelligence

★ Team player

References

★ Wilfred Trotter, ''The Instincts of the Herd in Peace and War'', 1914.

★ Brunnermeier, Markus Konrad. ''Asset Pricing under Asymmetric Information : Bubbles, Crashes, Technical Analysis, and Herding''. Oxford, UK ; New York: Oxford University Press, 2001.

★ Rook, Laurens. "An Economic Psychological Approach to Herd Behavior." Journal of Economic Issues 40.1 (2006): 75-95.

★ Hamilton, W D. Geometry for the Selfish Herd. Diss. Imperial College, 1970.

★ Rook, Laurens. "An Economic Psychological Approach to Herd Behavior." Journal of Economic Issues XL (2006): 75-95. Ebsco. Fall. Keyword: herd Behavior.

★ Stanford, Craig B. "Avoiding Predators: Expectations and Evidence in Primate Antipredator Behavior." International Journal of Primatology 23 (2001): 741-757. Ebsco. Fall. Keyword: Herd Behavior.

★ Ottavian, Marcco, and Peter Sorenson. Herd Behavior and Investment.

Further reading

★ Transmission of Information and Herd Behavior in Finance Irrationnalites en bourse... les simuler! les expliquer? (fr)