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Herd behaviour describes how individuals in a group can act together without planned direction. The term pertains to the behaviour 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.
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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. W. D. Hamilton, "Geometry For The Selfish Herd," Journal of Theoretical Biology, Volume 31, Issue 2, pp. 295-311. heard bevaiour is evil, do your chores
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). Swarm theory observed in non-human societies is a related concept and is being explored as it occurs in human society.
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. Markus K. Brunnermeier, Asset Pricing under Asymmetric Information: Bubbles, Crashes, Technical Analysis, and Herding, Oxford University Press (2001).
Some followers of the technical analysis school of investing see the herding behaviour of investors as an example of extreme market sentiment.Robert Prechter, The Wave Principle of Human Social Behavior, New Classics Library (1999), pp. 152-153. The academic study of behavioral finance has identified herding in the collective irrationality of investors, particularly the work of Robert ShillerRobert J. Shiller, Irrational Exuberance, Princeton University Press (2000), pp. 149-153., and Nobel laureates Vernon Smith, Amos Tversky, and Daniel Kahneman.
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 behaviour. 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.
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Followers of certain religious cults and political movements have exhibited herd behaviour, often involving a cult of personality.[citation needed] 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.[citation needed] In political movements, the dictators Adolf Hitler and Joseph Stalin relied heavily on a cult of personality.[citation needed]
Benign herding behaviors may be frequent in everyday decisions based on learning from the information of others, as when a person on the street decides 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. This phenomenon is also referred to as an information cascade. Abhijit V. Banerjee, "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, Vol. 107, No. 3, pp. 797-817. Sushil Bikhchandani, David Hirshleifer, Ivo Welch. October 1992. "A Theory of Fads, Fashion, Custom, and Cultural Change as Informational Cascades." Journal of Political Economy, Vol. 100, No.5, pp. 992-1026.
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