Herd behavior
Encyclopedia
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 bubble
s and crashes, street demonstrations, sporting events, religious gatherings, episodes of mob violence and everyday decision-making, judgment and opinion-forming.
Raafat, Chater and Frith proposed an integrated approach to herding, describing two key issues, the mechanisms of transmission of thoughts or behavior between individuals and the patterns of connections between them. They suggested that bringing together diverse theoretical approaches of herding behavior illuminates the applicability of the concept to many domains, ranging from cognitive neuroscience to economics.
asserted that 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 as a unit in moving together, but its function emerges from the uncoordinated behavior of self-serving individuals.
and Friedrich Nietzsche
were among the first to criticize what they referred to as "the crowd" (Kierkegaard) and "herd morality" and the "herd instinct" (Nietzsche) in human society. Modern 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.
Some followers of the technical analysis
school of investing see the herding behavior of investors as an example of extreme market sentiment
. The academic study of behavioral finance
has identified herding in the collective irrationality of investors, particularly the work of Robert Shiller
, and Nobel
laureates Vernon L. Smith
, Amos Tversky
, and Daniel Kahneman
.
Hey and Morone (2004) analyzed a model of herd behavior in a market context. Their work is related to at least two important strands of literature. The first of these strands is that on herd behavior in a non-market context. The seminal references are Banerjee (1992) and Bikhchandani, Hirshleifer and Welch (1992), both of which showed that herd behavior may result from private information not publicly shared. More specifically, both of these papers showed that individuals, acting sequentially on the basis of private information and public knowledge about the behavior of others, may end up choosing the socially undesirable option. The second of the strands of literature motivating this paper is that of information aggregation in market contexts. A very early reference is the classic paper by Grossman and Stiglitz (1976) that showed that uninformed traders in a market context can become informed through the price in such a way that private information is aggregated correctly and efficiently. A summary of the progress of this strand of literature can be found in the paper by Plott (2000). Hey and Morone (2004) showed that it is possible to observe herd-type behavior in a market context. Their result is even more interesting since it refers to a market with a well-defined fundamental value. Even if herd behavior might only be observed rarely, this has important consequences for a whole range of real markets – most particularly foreign exchange markets.
One such herdish incident was the price volatility that surrounded the 2007 Uranium bubble
, which started with flooding of the Cigar Lake Mine
in Saskatchewan
, during the year 2006.
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 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 Gustave 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.
Stock market bubble
A stock market bubble is a type of economic bubble taking place in stock markets when market participants drive stock prices above their value in relation to some system of stock valuation....
s and crashes, street demonstrations, sporting events, religious gatherings, episodes of mob violence and everyday decision-making, judgment and opinion-forming.
Raafat, Chater and Frith proposed an integrated approach to herding, describing two key issues, the mechanisms of transmission of thoughts or behavior between individuals and the patterns of connections between them. They suggested that bringing together diverse theoretical approaches of herding behavior illuminates the applicability of the concept to many domains, ranging from cognitive neuroscience to economics.
Herd behavior in animals
A group of animals fleeing a predator shows the nature of herd behavior. In 1971, in the oft cited article "Geometry For The Selfish Herd," evolutionary biologist W. D. HamiltonW. D. Hamilton
William Donald Hamilton FRS was a British evolutionary biologist, widely recognised as one of the greatest evolutionary theorists of the 20th century....
asserted that 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 as a unit in moving together, but its function emerges from the uncoordinated behavior of self-serving individuals.
Symmetry breaking in herding behavior
Asymmetric aggregation of animals under panic conditions has been observed in many species, including humans, mice, and ants. Theoretical models have demonstrated symmetry-breaking similar to observations in scientific studies. For example, when panicked individuals are confined to a room with two equal and equidistant exits, a majority will favor one exit while the minority will favor the other.Possible mechanisms
- HamiltonW. D. HamiltonWilliam Donald Hamilton FRS was a British evolutionary biologist, widely recognised as one of the greatest evolutionary theorists of the 20th century....
’s Selfish Herd Theory. - Byproduct of communication skill of social animal or runaway positive feedback.
- Neighbor copying.
Escape panic characteristics
- Individuals attempt to move faster than normal.
- Interactions between individuals become physical.
- Exits become arched and clogged.
- Escape is slowed by fallen individuals serving as obstacles.
- Individuals display a tendency towards mass or copied behavior.
- Alternative or less used exits are overlooked.
Herd behavior in human societies
The philosophers Søren KierkegaardSøren Kierkegaard
Søren Aabye Kierkegaard was a Danish Christian philosopher, theologian and religious author. He was a critic of idealist intellectuals and philosophers of his time, such as Georg Wilhelm Friedrich Hegel, Friedrich Wilhelm Joseph Schelling and Karl Wilhelm Friedrich Schlegel...
and Friedrich Nietzsche
Friedrich Nietzsche
Friedrich Wilhelm Nietzsche was a 19th-century German philosopher, poet, composer and classical philologist...
were among the first to criticize what they referred to as "the crowd" (Kierkegaard) and "herd morality" and the "herd instinct" (Nietzsche) in human society. Modern psychological
Psychology
Psychology is the study of the mind and behavior. Its immediate goal is to understand individuals and groups by both establishing general principles and researching specific cases. For many, the ultimate goal of psychology is to benefit society...
and economic
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
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
Wilfred Trotter
Wilfred Batten Lewis Trotter, FRS was a British surgeon, a pioneer in neurosurgery. He was also known for his studies on social psychology, most notably for his concept of the herd instinct, which he first outlined in two published papers in 1908, and later in his famous popular work Instincts of...
popularized the "herd behavior" phrase in his book, Instincts of the Herd in Peace and War
Instincts of the Herd in Peace and War
Instincts of the Herd in Peace and War is the title of a famous book by Wilfred Trotter. Based on the ideas of Gustave LeBon it was very influential in the development of Group dynamics and Crowd psychology and the Propaganda of Edward Bernays.- Quotes :...
(1914). In The Theory of the Leisure Class
The Theory of the Leisure Class
The Theory of the Leisure Class: An Economic Study of Institutions is a book, first published in 1899, by the Norwegian-American economist and sociologist Thorstein Veblen while he was a professor at the University of Chicago....
, Thorstein Veblen
Thorstein Veblen
Thorstein Bunde Veblen, born Torsten Bunde Veblen was an American economist and sociologist, and a leader of the so-called institutional economics movement...
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
Carl Jung
Carl Gustav Jung was a Swiss psychiatrist and the founder of Analytical Psychology. Jung is considered the first modern psychiatrist to view the human psyche as "by nature religious" and make it the focus of exploration. Jung is one of the best known researchers in the field of dream analysis and...
(collective unconscious), and Gustave Le Bon
Gustave Le Bon
Gustave Le Bon was a French social psychologist, sociologist, and amateur physicist...
(the popular mind).
Swarm theory observed in non-human societies is a related concept and is being explored as it occurs in human society.
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.Some followers of the technical analysis
Technical analysis
In finance, technical analysis is security analysis discipline for forecasting the direction of prices through the study of past market data, primarily price and volume. Behavioral economics and quantitative analysis incorporate technical analysis, which being an aspect of active management stands...
school of investing see the herding behavior of investors as an example of extreme market sentiment
Market sentiment
Market sentiment is the general prevailing attitude of investors as to anticipated price development in a market. This attitude is the accumulation of a variety of fundamental and technical factors, including price history, economic reports, seasonal factors, and national and world events.For...
. The academic study of behavioral finance
Behavioral finance
Behavioral economics and its related area of study, behavioral finance, use social, cognitive and emotional factors in understanding the economic decisions of individuals and institutions performing economic functions, including consumers, borrowers and investors, and their effects on market...
has identified herding in the collective irrationality of investors, particularly the work of Robert Shiller
Robert Shiller
Robert James "Bob" Shiller is an American economist, academic, and best-selling author. He currently serves as the Arthur M. Okun Professor of Economics at Yale University and is a Fellow at the Yale International Center for Finance, Yale School of Management...
, and Nobel
Nobel Prize
The Nobel Prizes are annual international awards bestowed by Scandinavian committees in recognition of cultural and scientific advances. The will of the Swedish chemist Alfred Nobel, the inventor of dynamite, established the prizes in 1895...
laureates Vernon L. Smith
Vernon L. Smith
Vernon Lomax Smith is professor of economics at Chapman University's Argyros School of Business and Economics and School of Law in Orange, California, a research scholar at George Mason University Interdisciplinary Center for Economic Science, and a Fellow of the Mercatus Center, all in Arlington,...
, Amos Tversky
Amos Tversky
Amos Nathan Tversky, was a cognitive and mathematical psychologist, a pioneer of cognitive science, a longtime collaborator of Daniel Kahneman, and a key figure in the discovery of systematic human cognitive bias and handling of risk. Much of his early work concerned the foundations of measurement...
, and Daniel Kahneman
Daniel Kahneman
Daniel Kahneman is an Israeli-American psychologist and Nobel laureate. He is notable for his work on the psychology of judgment and decision-making, behavioral economics and hedonic psychology....
.
Hey and Morone (2004) analyzed a model of herd behavior in a market context. Their work is related to at least two important strands of literature. The first of these strands is that on herd behavior in a non-market context. The seminal references are Banerjee (1992) and Bikhchandani, Hirshleifer and Welch (1992), both of which showed that herd behavior may result from private information not publicly shared. More specifically, both of these papers showed that individuals, acting sequentially on the basis of private information and public knowledge about the behavior of others, may end up choosing the socially undesirable option. The second of the strands of literature motivating this paper is that of information aggregation in market contexts. A very early reference is the classic paper by Grossman and Stiglitz (1976) that showed that uninformed traders in a market context can become informed through the price in such a way that private information is aggregated correctly and efficiently. A summary of the progress of this strand of literature can be found in the paper by Plott (2000). Hey and Morone (2004) showed that it is possible to observe herd-type behavior in a market context. Their result is even more interesting since it refers to a market with a well-defined fundamental value. Even if herd behavior might only be observed rarely, this has important consequences for a whole range of real markets – most particularly foreign exchange markets.
One such herdish incident was the price volatility that surrounded the 2007 Uranium bubble
Uranium bubble of 2007
The uranium bubble of 2007 was a period of nearly exponential growth in the price of natural uranium, starting in 2005 and peaking at roughly 300$/kg in mid-2007. This coincided with significant rises of stock price of uranium mining and exploration companies...
, which started with flooding of the Cigar Lake Mine
Cigar Lake Mine
The Cigar Lake Mine is the largest undeveloped high grade uranium deposit in the world, located in the uranium rich Athabasca Basin of northern Saskatchewan, Canada....
in Saskatchewan
Saskatchewan
Saskatchewan is a prairie province in Canada, which has an area of . Saskatchewan is bordered on the west by Alberta, on the north by the Northwest Territories, on the east by Manitoba, and on the south by the U.S. states of Montana and North Dakota....
, during the year 2006.
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 Los Angeles riots of 1992, New York Draft RiotsNew York Draft Riots
The New York City draft riots were violent disturbances in New York City that were the culmination of discontent with new laws passed by Congress to draft men to fight in the ongoing American Civil War. The riots were the largest civil insurrection in American history apart from the Civil War itself...
and Tulsa Race Riot
Tulsa Race Riot
The Tulsa race riot was a large-scale racially motivated conflict, May 31 - June 1st 1921, between the white and black communities of Tulsa, Oklahoma, in which the wealthiest African-American community in the United States, the Greenwood District also known as 'The Negro Wall St' was burned to the...
are notorious in U.S. history, but those episodes are dwarfed by the scale of violence and death during the Partition of India
Partition of India
The Partition of India was the partition of British India on the basis of religious demographics that led to the creation of the sovereign states of the Dominion of Pakistan and the Union of India on 14 and 15...
. Population exchanges between India and Pakistan brought millions of migrating Hindus and Muslims into 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
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
social psychologists Gabriel Tarde
Gabriel Tarde
Jean-Gabriel De Tarde or Gabriel Tarde in short French sociologist, criminologist and social psychologist who conceived sociology as based on small psychological interactions among individuals , the fundamental forces being imitation and innovation.- Theory :Among the concepts...
and Gustave Le Bon
Gustave Le Bon
Gustave Le Bon was a French social psychologist, sociologist, and amateur physicist...
.
Sporting events can also produce violent episodes of herd behavior. The most violent single riot in history may be the sixth-century Nika riots
Nika riots
The Nika riots , or Nika revolt, took place over the course of a week in Constantinople in AD 532. It was the most violent riot that Constantinople had ever seen to that point, with nearly half the city being burned or destroyed and tens of thousands of people killed.-Background:The ancient Roman...
in Constantinople
Constantinople
Constantinople was the capital of the Roman, Eastern Roman, Byzantine, Latin, and Ottoman Empires. Throughout most of the Middle Ages, Constantinople was Europe's largest and wealthiest city.-Names:...
, precipitated by partisan factions attending the chariot races. The football hooliganism
Football hooliganism
Football hooliganism, sometimes referred to by the British media as the English Disease, is unruly and destructive behaviour—such as brawls, vandalism and intimidation—by association football club fans...
of the 1980s was a well-publicized, latter-day example of sports violence.
Everyday decision-making
"Benign" herding behaviors may occur frequently 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 as an information cascade.See also
- AnxietyAnxietyAnxiety is a psychological and physiological state characterized by somatic, emotional, cognitive, and behavioral components. The root meaning of the word anxiety is 'to vex or trouble'; in either presence or absence of psychological stress, anxiety can create feelings of fear, worry, uneasiness,...
- Bandwagon effectBandwagon effectThe bandwagon effect is a well documented form of groupthink in behavioral science and has many applications. The general rule is that conduct or beliefs spread among people, as fads and trends clearly do, with "the probability of any individual adopting it increasing with the proportion who have...
- Collective behaviorCollective behaviorThe expression collective behaviour was first used by Robert E. Park, and employed definitively by Herbert Blumer, to refer to social processes and events which do not reflect existing social structure , but which emerge in a "spontaneous" way.Collective behavior might also be defined as action...
- Collective consciousnessCollective consciousnessCollective consciousness was a term coined by the French sociologist Émile Durkheim to refer to the shared beliefs and moral attitudes which operate as a unifying force within society...
- Collective effervescenceCollective EffervescenceCollective effervescence is a perceived energy formed by a gathering of people as might be experienced at a sporting event, a carnival, a rave, or a riot...
- Collective intelligenceCollective intelligenceCollective intelligence is a shared or group intelligence that emerges from the collaboration and competition of many individuals and appears in consensus decision making in bacteria, animals, humans and computer networks....
- Crowd psychologyCrowd psychologyCrowd psychology is a branch of social psychology. Ordinary people can typically gain direct power by acting collectively. Historically, because large groups of people have been able to bring about dramatic and sudden social change in a manner that bypasses established due process, they have also...
- ConformityConformityConformity is the process by which an individual's attitudes, beliefs, and behaviors are influenced by other people.Conformity may also refer to:*Conformity: A Tale, a novel by Charlotte Elizabeth Tonna...
- FearFearFear is a distressing negative sensation induced by a perceived threat. It is a basic survival mechanism occurring in response to a specific stimulus, such as pain or the threat of danger...
- Flocking (behavior)Flocking (behavior)Flocking behavior is the behavior exhibited when a group of birds, called a flock, are foraging or in flight. There are parallels with the shoaling behavior of fish, the swarming behavior of insects, and herd behavior of land animals....
- Group behavior
- GroupthinkGroupthinkGroupthink is a psychological phenomenon that occurs within groups of people. It is the mode of thinking that happens when the desire for harmony in a decision-making group overrides a realistic appraisal of alternatives. Group members try to minimize conflict and reach a consensus decision without...
- HerdHerdHerd refers to a social grouping of certain animals of the same species, either wild or domestic, and also to the form of collective animal behavior associated with this or as a verb, to herd, to its control by another species such as humans or dogs.The term herd is generally applied to mammals,...
- Herd mentalityHerd mentalityHerd mentality describes how people are influenced by their peers to adopt certain behaviors, follow trends, and/or purchase items. Examples of the herd mentality include stock market trends, fashions in apparel, cars, taste in music, home décor, etc...
- Hive mindCollective consciousnessCollective consciousness was a term coined by the French sociologist Émile Durkheim to refer to the shared beliefs and moral attitudes which operate as a unifying force within society...
- Informational cascadeInformational cascadeAn information cascade occurs when people observe the actions of others and then make the same choice that the others have made, independently of their own private information signals...
- Mass hysteria
- Mean world syndromeMean World Syndrome"Mean world syndrome" is a term coined by George Gerbner to describe a phenomenon whereby violence-related content of mass media makes viewers believe that the world is more dangerous than it actually is. Mean world syndrome is one of the main conclusions of cultivation theory...
- MemeMemeA meme is "an idea, behaviour or style that spreads from person to person within a culture."A meme acts as a unit for carrying cultural ideas, symbols or practices, which can be transmitted from one mind to another through writing, speech, gestures, rituals or other imitable phenomena...
- Mob ruleOchlocracyOchlocracy or mob rule is government by mob or a mass of people, or the intimidation of legitimate authorities.As a pejorative for majoritarianism, it is akin to the Latin phrase mobile vulgus meaning "the fickle crowd", from which the English term "mob" was originally derived in the...
- Moral panicMoral panicA moral panic is the intensity of feeling expressed in a population about an issue that appears to threaten the social order. According to Stanley Cohen, author of Folk Devils and Moral Panics and credited creator of the term, a moral panic occurs when "[a] condition, episode, person or group of...
- PropagandaPropagandaPropaganda is a form of communication that is aimed at influencing the attitude of a community toward some cause or position so as to benefit oneself or one's group....
- Self-organizationSelf-organizationSelf-organization is the process where a structure or pattern appears in a system without a central authority or external element imposing it through planning...
- SheepleSheepleSheeple is a term of disparagement, in which people are likened to the herd animals sheep. The term is often used to denote persons who voluntarily acquiesce to a perceived authority figure's suggestion without critical analysis or sufficient research to understand the ramifications of that decision...
- Social proofSocial proofSocial proof, also known as informational social influence, is a psychological phenomenon where people assume the actions of others reflect correct behavior for a given situation...
- Socionomics
- Spontaneous orderSpontaneous orderSpontaneous order, also known as "self-organization", is the spontaneous emergence of order out of seeming chaos. It is a process found in physical, biological, and social networks, as well as economics, though the term "self-organization" is more often used for physical and biological processes,...
- Swarm intelligenceSwarm intelligenceSwarm intelligence is the collective behaviour of decentralized, self-organized systems, natural or artificial. The concept is employed in work on artificial intelligence...
- Symmetry Breaking in Herding Behavior
- Team player
- The 2009 Birmingham, Millennium Point stampede
- The Hillsborough disasterHillsborough disasterThe Hillsborough disaster was a human crush that occurred on 15 April 1989 at Hillsborough, a football stadium, the home of Sheffield Wednesday F.C. in Sheffield, England, resulting in the deaths of 96 people, and 766 being injured, all fans of Liverpool F.C....
- RiotRiotA riot is a form of civil disorder characterized often by what is thought of as disorganized groups lashing out in a sudden and intense rash of violence against authority, property or people. While individuals may attempt to lead or control a riot, riots are thought to be typically chaotic and...
- StampedeStampedeA stampede is an act of mass impulse among herd animals or a crowd of people in which the herd collectively begins running with no clear direction or purpose....