This paper extends the model of information cascade (Bikhchandani, Hirshleifer, and Welch, 1992) by introducing two correlated queues of players. By comparing the equilibrium outcomes of the two-queue game with the benchmark one-queue game, this paper finds out that the observability of...

We analyze herding behavior in the Chinese stock markets in the context of the COVID-19 pandemic using the cross-sectional absolute deviation (CSAD) model proposed by Chang et al. (2000) to detect herding behavior in the time period between January 30, 2001, and June 12, 2020. We consider stock...

This study explores the nexus between investors’ sentiments and herding behavior toward the market consensus in the U.S. and Europe stock markets from January, 2005 to April, 2021. We document strong evidence of herding during periods characterized by high level of sentiments. Our results...

Applying previous theoretical predictions on herding and market signals, we examine mutual fund herding from a perspective of anticipated risks and risk shocks. Funds herd when expecting risk but scatter as risk strikes surprisingly. We measure fund herding using cosine similarity of...

This paper studies the herding behavior in managers’ investment decision; “Herding”, specifically, is defined as managers’ chosen optimal investment level deviates from the first best and is drawn closer to an external reference point - for example, the average investment level in an...

Do corporate bond funds have a real impact on firm policies? In this paper, we examine whether fund herding alters the overall information environment of a firm’s credit risk, and thus affects the firm’s decision to issue bonds. Using the firm-level measure of herding by U.S. bond mutual...

We examine the herding behavior of individual investors on institutional investors in the US equity fund market. Based on a theoretical background, our empirical investigation determines that the significant herding behavior of individual investors is based on the trading size of institutional...

This paper provides new evidence on herding behavior. We use a five-year period and daily data for 336 listed firms from the US capital market putting under the microscope three important elements of financial herding behavior. First, trading volume, representing market interest, as a...

Expert reviews in a multi-dimensional rating system are increasingly popular on online review platforms. However, extant studies have primarily examined expert reviews in a single-dimensional rating system. Using a quasi-experiment opportunity provided by an automobile review platform, we...