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Herding behavior in asset markets

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  • Hott, Christian

Abstract

This paper examines the origins of herding behavior in asset markets and its potential to produce a price bubble. I present a model which explains the emergence and the development of herding behavior via asymmetric information and Baysian learning. A corresponding price bubble is explained through herding behavior without assuming any speculative incentives on the part of the investors.

Suggested Citation

  • Hott, Christian, 2009. "Herding behavior in asset markets," Journal of Financial Stability, Elsevier, vol. 5(1), pages 35-56, January.
    • Handle: RePEc:eee:finsta:v:5:y:2009:i:1:p:35-56
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