Financial markets shaken by institutional herding, new model predicts intensity.
The article explores how people tend to follow the crowd in financial markets, known as herd behavior. By using computer simulations, the researchers made new predictions about how intense this behavior can be. They found that the level of risk in the information available affects how much people herd together. However, they also discovered that the increase in people buying at the same time during the financial crisis couldn't be explained by their model.