In social-learning environments, we investigate implications of the assumption that people naively believe that each …

In an observational learning environment, rational agents with incomplete information may mimic the actions of their … predecessors even when their own signal suggests the opposite. This herding behaviour may lead the society to an inefficient … to a decline in the probability of inefficient herding, because the first movers are more likely to make the correct …

depositors of a failed bank can migrate to the surviving bank, then herding incentives are partially mitigated and this gives … localized nature of contagion and herding, and the welfare properties, are also characterized. …

In an observational learning environment rational agents may mimic the actions of the predecessors even when their own … action, resulting in an inefficient informational cascade. This paper models observational learning in continuous time with … probability of inefficient herding. The analysis also suggests that markets with quick response to investment decisions, such as …

We propose a new approach to detecting and measuring herding which is based on the cross-sectional dispersion of the … factor sensitivity of assets within a given market. This method enables us to evaluate if there is herding towards particular … sectors or styles in the market including the market index itself and critically we can also separate such herding from common …

Most real world situations that are susceptible to herding are also characterized by direct payoff externalities. Yet …, the bulk of the theoretical and experimental literature on herding has focused on pure informational externalities. In … effects, first-mover advantage, etc.) in a standard information-based herding model. Our results are based on an internet …

policy implications. Last, applications of this theory to other issues such as self-knowledge, willpower and habit formation …