Herd behaviour

Herd behavior is the term used to describe situations in which a group of individuals react coherently without there being any coordination between them. Such a group is called a herd. The term is used uncontentiously to describe the behaviour of animals within herds and flocks, and more controversially to describe some kinds of human phenomena such as stock market bubbles, and behaviour in political demonstrations.

Herd behavior in animals
The case of animals evading a predator illustrates the uncoordinated nature of herd behavior. It can be shown that each individual can minimise the danger to itself by choosing the location and behavior that is as close to the center of the group as possible; this was the subject of a famous paper by evolutionary biologist W. D. Hamilton called Geometry For The Selfish Herd. The herd thus appears to act as one in always moving and acting together, but its behavior emerges from the uncoordinated behavior of self-seeking individuals.

The concept of herd behavior as applied to human societies (crazes)
The phrase "herd behavior" has acquired a certain currency in popular psychology, where the idea of a herding instinct is offered as an explanation of phenomena such as crazes where large numbers of people act in the same way at the same time. Such people are sometimes labelled with the derogatory term "sheeple."

A craze is an excessive fad or collective mania due to herd behavior. Some crazes have mild consequences (fashions). But others lead to the excesses of mass hysteria. Popular psychologists describe this as involving the disappearance of the individual personality, with regression to some lowest emotional instinctive denominator described as "crowd sentiment". The evidence that there is any real psychological process of this nature is, however, weak, and in many cases the term "herd behavior" is strikingly inappropriate for the phenomena, since the group is reacting under the orders or influence of a charismatic leader (see charisma.)

Examples of phenomena that have been described as involving herd behavior include stock market bubbles, stock market crashes, riots, demonisation and persecution of minorities, and political or religious zealotry. In reality these behaviours may have little in common other than the superficial fact that they all involve a number of individuals doing more or less the same thing, and the extent to which they can reasonably described as "herd behaviours" varies. Attributing such collective behaviour to a "pack mentality" or "group mind" explains little, and is most likely to divert attention from the true explanation of the group's actions. The following examples illustrate the range of phenomena to which the label "herd behaviour" has been attached at one time or another.

Stock market bubbles
In the case of stock market bubbles, the optimal behaviour for an individual may be to do what everyone else is doing, because even though everyone knows that they are in a bubble, until it bursts, most profit is to be made by staying in the market. In this case the term "herd behaviour" is relatively appropriate, because the "collective" behaviour emerges from uncoordinated individual choices. Interestingly, though the behaviour of the group is evidently irrational, the behaviour of the individuals that cause it is rational at least in the short term, though it does show some abandonment of risk aversion, as the crash usually occurs without much warning. These phenomena are now much better understood as a result of investigations in experimental economics and behavioural finance, particularly by Nobel laureates Vernon Smith and Daniel Kahneman.

Everyday decision-making
Herding behavior is frequent, and often relatively benign, in everyday decision making. Not knowing which of several options is best, a person may use others' choices as clues as to how to behave. While this can be reasonable, this behavior leaves open the possibility of random influences on choices. Consider for example, a person walking down the street and deciding which of two restaurants to dine at. Both look pretty good, and, as it is early in the evening, both are empty. At random, this person chooses restaurant A. A little later, a couple strolls down the street looking for a place to eat. Seeing that one restaurant is empty and the other has a couple of customers, they figure that the one with customers is probably better and enter that one as well, and so on into the evening, so that restaurant A does better than B that night.

Behaviour in demonstrations
Although the term "herd behaviour" has often been applied to behaviour in political demonstrations, its appropriateness is more questionable, since such groups commonly are co-ordinated to some extent. The idea of a "group mind" or "mob behaviour" was put forward by the French social psychologists Gabriel Tarde and Gustav Le Bon, and was widely adopted by right-wing politicians, particularly in the inter-war years, to justify the repression of demonstrations.

Religious and political affiliations
People who are sometimes accused of herd behaviour are followers of religions, new religious movements, and cults, especially if they follow a charismatic leader. Nazism is for many people the most shocking example of this kind of herd behaviour. Here the term "herd behaviour" seems quite inappropriate for the actual behaviour of the group, however, since people are clearly responding to a leader, and their behaviour is often closely co-ordinated with careful delineation of roles. Deciding to affiliate to such a group, however, can reasonably be thought of as a craze like any other.