Financial professionals exhibit herd behavior in markets, defying traditional theories.
The article explores herd behavior in financial markets using a laboratory experiment with financial professionals. Two scenarios were compared: one where herding should not happen due to price adjustments, and one where herding could occur due to uncertainty. In the first scenario, herding was rare, but some individuals went against the trend. In the second scenario, herding increased, but not as much as expected, and contrarianism disappeared.