Enhance Your Learning with Economics - Herd Behavior Flash Cards for quick understanding
The tendency of individuals to follow the actions and decisions of a larger group, often leading to irrational behavior and decision making.
A phenomenon in which individuals base their decisions on the actions of others, rather than on their own independent analysis of available information.
The tendency of individuals to adopt certain behaviors or beliefs simply because many others are doing so, regardless of their own personal judgment.
The anxiety or apprehension that an individual feels when they believe others might be having rewarding experiences or opportunities that they are not part of.
A situation in which the price of an asset or security becomes significantly inflated due to excessive buying driven by herd behavior, leading to an eventual collapse.
The practice of buying or selling financial instruments, such as stocks or commodities, with the expectation of making a profit based on anticipated price movements driven by herd behavior.
The spread of panic or irrational behavior among individuals or financial institutions, often triggered by a single event or news, leading to a domino effect of negative consequences.
A situation in which individuals or institutions take excessive risks, knowing that they will be protected from the negative consequences of their actions by others, such as government bailouts.
The tendency of individuals to conform to the opinions, behaviors, or actions of a larger group, often without critically evaluating the information or rationale behind those opinions or actions.
The tendency of individuals to seek out or interpret information in a way that confirms their preexisting beliefs or biases, often leading to the reinforcement of herd behavior.
The deliberate attempt to interfere with the free and fair operation of financial markets, often through spreading false information or engaging in fraudulent activities to influence herd behavior.
A concept in epidemiology where a population becomes resistant to the spread of a contagious disease due to a significant portion of individuals being immune, reducing the overall risk of infection.
A form of herd behavior in which individuals make decisions based on their own rational analysis of available information, rather than blindly following the actions of others.
An investment strategy that involves going against the prevailing market trend or sentiment, based on the belief that herd behavior often leads to mispricing of assets, presenting opportunities for profit.
A psychological phenomenon in which individuals assume the actions or decisions of others in an attempt to reflect correct behavior in a given situation, often leading to herd behavior.
A process in which individuals observe the actions of others and use that information to make their own decisions, even if the initial actions were based on limited or incorrect information.
A behavioral bias in which individuals respond disproportionately to new information or events, often leading to exaggerated market movements driven by herd behavior.
A behavioral bias in which individuals fail to fully incorporate new information or events into their decision-making process, often leading to delayed market adjustments driven by herd behavior.
A psychological phenomenon in which a group of individuals prioritize consensus and conformity over critical thinking and independent analysis, often leading to flawed decision making and herd behavior.
The overall attitude or mood of investors towards a particular market or asset class, often influenced by herd behavior and collective emotions rather than fundamental analysis.
The study of how psychological factors, such as emotions, biases, and cognitive errors, influence the behavior and decision making of investors, including herd behavior.
The innate tendency of individuals to seek safety and security by aligning their actions and decisions with those of a larger group, often driven by the fear of being left out or making independent mistakes.
The excessive promotion or excitement surrounding a particular investment or asset, often fueled by herd behavior and speculative buying, leading to inflated prices and potential market bubbles.
A field of study that combines principles of psychology and economics to understand and explain how psychological biases and emotions influence financial decision making, including herd behavior.
The phenomenon in which a large number of investors make similar investment decisions at the same time, often driven by the desire to follow the crowd and avoid potential regret.
A state of extreme excitement and speculative activity in financial markets, often characterized by rapid price movements and high trading volumes driven by herd behavior.
The mass selling of assets or securities by investors, often triggered by negative news or a perceived market downturn, leading to further price declines driven by herd behavior.
Individuals or entities that intentionally engage in fraudulent or deceptive practices to influence market prices and investor behavior, often exploiting herd behavior for personal gain.
The mass buying of assets or securities by investors, often driven by positive news or a perceived market upswing, leading to further price increases driven by herd behavior.
The degree of variation or fluctuation in the price or value of a financial market or asset, often influenced by herd behavior and collective investor sentiment.
The overall attitude or outlook of investors towards the future direction of financial markets or specific assets, often influenced by herd behavior and emotional biases.
A concept in behavioral economics that suggests individuals can collectively exhibit rational behavior, even if individual decisions may seem irrational, due to the aggregation of information and actions.
The degree to which financial markets reflect all available information and adjust prices accordingly, often challenged by herd behavior and the presence of irrational investors.
A state of extreme fear and anxiety among investors, often triggered by a sudden market downturn or negative news, leading to irrational selling and further price declines driven by herd behavior.
Market participants who take positions opposite to the prevailing market trend or sentiment, often betting against herd behavior and expecting a reversal in market direction.
The feeling of disappointment or remorse experienced by investors when their investment decisions result in losses or missed opportunities, often leading to herd behavior as they try to avoid future regret.
Irrelevant or misleading information that can distort market prices and investor behavior, often amplified by herd behavior and the tendency to follow the actions of others.
The tendency of investors to make decisions based on emotions, biases, or cognitive errors, rather than rational analysis, often leading to herd behavior and market inefficiencies.
The tendency of investors to overestimate their own abilities and the accuracy of their predictions, often leading to excessive risk-taking and susceptibility to herd behavior.
A temporary reversal in the prevailing market trend, often characterized by a significant price decline or increase, driven by the collective actions of investors and herd behavior.
An intense desire for excessive profits or returns on investments, often leading to irrational decision making and susceptibility to herd behavior driven by the fear of missing out on potential gains.
An intense emotional response to perceived threats or risks in financial markets, often leading to irrational selling and further price declines driven by herd behavior.
A situation in which the prices of assets or securities become significantly inflated due to excessive buying driven by herd behavior, leading to an eventual collapse and sharp price decline.
The ability to remain calm and disciplined during periods of market volatility or uncertainty, often avoiding herd behavior and making rational investment decisions based on long-term goals.
The ability of investors to make decisions based on rational analysis and objective evaluation of available information, often challenging the presence and influence of herd behavior in financial markets.
A state of extreme fear, panic, or excitement among investors, often characterized by irrational buying or selling driven by herd behavior and collective emotions.
The ability to adhere to a predetermined investment strategy or plan, often avoiding impulsive decisions driven by herd behavior and short-term market fluctuations.