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A simple model of herd behavior, a comment

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  • Morone, Andrea

Abstract

In this paper we analyze the role played by the tie-breaking assumptions in Banerjee’s model of herd behavior. Changing one assumption we obtain three important results: players’ strategies are parameter dependent; an incorrect herd could be reversed; a correct herd is irreversible.

Suggested Citation

  • Morone, Andrea, 2012. "A simple model of herd behavior, a comment," Economics Letters, Elsevier, vol. 114(2), pages 208-211.
  • Handle: RePEc:eee:ecolet:v:114:y:2012:i:2:p:208-211 DOI: 10.1016/j.econlet.2011.09.024
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    References listed on IDEAS

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    1. Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 797-817.
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    Cited by:

    1. Morone, Andrea & Nuzzo, Simone, 2016. "Do Markets (Institutions) Drive Out Lemmings or Vice Versa?," EconStor Preprints 146917, ZBW - German National Library of Economics.
    2. Morone, Andrea & Nuzzo, Simone, 2015. "Market Efficiency, Trading Institutions and Information Mirages: evidence from an experimental asset market," MPRA Paper 67448, University Library of Munich, Germany.
    3. Giovanni Ferri & Andrea Morone, 2014. "The effect of rating agencies on herd behaviour," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, pages 107-127.
    4. Hien Tran & Enrico Santarelli & Enrico Zaninotto, 2015. "Efficiency or bounded rationality? Drivers of firm diversification strategies in Vietnam," Journal of Evolutionary Economics, Springer, vol. 25(5), pages 983-1010, November.
    5. Kurz, Claudia & Kurz-Kim, Jeong-Ryeol, 2013. "What determines the dynamics of absolute excess returns on stock markets?," Economics Letters, Elsevier, vol. 118(2), pages 342-346.

    More about this item

    Keywords

    Herd behavior; Tie-breaking rules; Lock-in;

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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