Week 36 Day 1: Herding: The Instinct to Follow the Crowd

When everyone around you is buying, you feel compelled to buy. When everyone is selling, panic is contagious. Herding behavior explains bubbles and crashes: rational individuals making irrational coll...

When everyone around you is buying, you feel compelled to buy. When everyone is selling, panic is contagious. Herding behavior explains bubbles and crashes: rational individuals making irrational collective decisions because following the crowd feels safer than standing alone.