Financial Quotient

What is herding?

Residents walking outside GHK @ Khatib coffee shop at Yishun Street 81 on Feb 22, 2020. ST PHOTO: LIM YAOHUI
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Herding behaviour refers to the tendency to follow the majority. In the animal kingdom, goats and sheep travel in herds for safety from predators and help in finding food. Similarly, there is a social tendency for people to herd with others acting in the same way at the same time.

Sometimes, people herd for a rational reason, such as incomplete information or a concern about reputation.

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A version of this article appeared in the print edition of The Sunday Times on March 22, 2020, with the headline What is herding?. Subscribe