An economic psychological approach to herd

an economic psychological approach to herd If economic behaviour, herding included, reflects the interactions of different neurological systems then a neuroeconomic approach, which blends economics, psychology and evolutionary biology with social neuroscience, will provide an explanation of herding as the product of both cognition and emotion.

Most psychologists and economists would probably agree with tim harford’s observation that be appears to have become a catch-all term for any type of psychology applied to real-world problems (hartford, 2014) many of the nudges tested by the uk’s bit, for example, are social-psychological in nature (eg attempting to increase organ donation rates through social proof.

an economic psychological approach to herd If economic behaviour, herding included, reflects the interactions of different neurological systems then a neuroeconomic approach, which blends economics, psychology and evolutionary biology with social neuroscience, will provide an explanation of herding as the product of both cognition and emotion.

These results, although partial and speculative, suggest a new approach to the study of cultural markets, and indicate the potential of web-based experiments to explore the social psychological origin of other macrosocio- logical phenomena. Modern psychological and economic research has identified herd behavior in humans to explain the phenomena of large numbers of people acting in the same way at the same time the british surgeon wilfred trotter popularized the herd behavior phrase in his book, instincts of the herd in peace and war (1914.

Herd behavior describes how individuals in a group can act collectively without centralized direction the term can refer to the behavior of animals in herds , packs , bird flocks , fish schools and so on, as well as the behavior of humans in demonstrations, riots and general strikes , [1] sporting events, religious gatherings, episodes of mob violence and everyday decision-making, judgement and opinion-forming.

In this paper, first the problem of herd behavior is made clear via the historical development of the concept in economics and social psychology accordingly, the focus is on differences between the approaches second, an integrated economic psychological approach to herd behavior is proposed, attempting to overcome theoretical and methodological differences.

An economic psychological approach to herd

Second, an integrated economic psychological approach to herd behavior is proposed, attempting to overcome theoretical and methodological differences to demonstrate its importance and to illustrate the theoretical and methodological problems that need to be overcome, the framework is applied to decision making in the presence of groupthink, a. First, unlike behavioral finance literature's (barberis and thaler, 2003 shiller, 2003) mere emphasis of kahneman and tversky's (1979) psychological framing effect on decisions under uncertainty, the filter-like traditional trading procedure imposes an institutional frame setting off herd behavior in financial markets (see, eg, bikhchandani and sharma, 2000 rook, 2006. The phenomenon of herd behavior was among the first topics studied in social psychology (van ginneken 1992) early economists like thorstein veblen (1899) and sociologists like georg simmel ([1904] 1957) applied it to sudden shifts in consumer behavior such as fashions and fads.

  • Unconscious herding behavior as the psychological basis of financial market trends and patterns robert r prechter jr journal of psychology and financial markets.
  • Blending together ideas from the social and behavioural sciences, this paper argues that the behavioural approach adopted in most economic analysis, in its neglect of sociological and psychological forces and its simplistically dichotomous categorization of behaviour as either rational or not rational, is too narrow and stark.

Herd behavior explained herd behavior describes how individuals in a group can act collectively modern psychological and economic research has identified herd behavior in humans to explain the phenomenon of large numbers of rook laurens an economic psychological approach to herd behavior journal of economic issues 40 1 2006 75.

an economic psychological approach to herd If economic behaviour, herding included, reflects the interactions of different neurological systems then a neuroeconomic approach, which blends economics, psychology and evolutionary biology with social neuroscience, will provide an explanation of herding as the product of both cognition and emotion.
An economic psychological approach to herd
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