A Simple Model of Herd Behavior
Banerjee analyses a sequential decision model in which each decision maker looks at the choices of those before her, since they may hold useful information. Rational individuals following that logic end up in herd behaviour, doing what others do rather than using their own information. The resulting equilibrium is inefficient.
Banerjee analyses a sequential decision model in which each decision maker looks at the choices of those before her, since they may hold useful information. Rational individuals following that logic end up in herd behaviour, doing what others do rather than using their own information. The resulting equilibrium is inefficient.
Written from the abstract as shown on the OpenAlex record, read 2026-11-04.
What our sources record
Recorded when this source was checked, figures included, with page references and quotation marks removed.
Banerjee, A. V. (1992). A Simple Model of Herd Behavior. Quarterly Journal of Economics, 107(3), 797-817. doi:10.2307/2118364