Herd mentality

The idea of a "group mind" or "mob behavior" was first put forward by 19th-century French social psychologists Gabriel Tarde and Gustave Le Bon. Herd behavior in human societies has also been studied by Sigmund Freud and Wilfred Trotter, whose book Instincts of the Herd in Peace and War is a classic in the field of social psychology. Sociologist and economist Thorstein Veblen's The Theory of the Leisure Class illustrates how individuals imitate other group members of higher social status in their consumer behavior. More recently, Malcolm Gladwell in The Tipping Point, examines how cultural, social, and economic factors converge to create trends in consumer behavior. In 2004, the New Yorker's financial columnist James Suroweicki published The Wisdom of Crowds.

Twenty-first-century academic fields such as marketing and behavioral finance attempt to identify and predict the rational and irrational behavior of investors. (See the work of Daniel Kahneman, Robert Shiller, Vernon L. Smith, and Amos Tversky.) Driven by emotional reactions such as greed and fear, investors can be seen to join in frantic purchasing and sales of stocks, creating bubbles and crashes. As a result, herd behavior is closely studied by behavioral finance experts in order to help predict future economic crises.[1]

Participants had to state which line (A, B, or C) was most similar to the target line out loud.

The Asch conformity experiments (1951) involved a series of studies directed by American Psychologist Solomon Asch that measured the effects of majority group belief and opinion on individuals. 50 male students from Swarthmore College participated in a vision test with a line judgement task. A naive participant was put in a room with seven confederates (i.e. actors) who had agreed in advance to match their responses. The participant was not aware of this and was told that the actors were also naive participants.[2] There was one control condition with no confederates. Confederates purposefully gave the wrong answer on 12 trials. The other participant usually went with the group and said the wrong answer. Through 18 trials total, Asch (1951) found that one third (33%) of naive participants conformed with the clearly incorrect majority, with 75% of participants over the 12 trials. Less than 1% of participants gave the wrong answer when there were no confederates.[2]

Researchers at Leeds University performed a group experiment where volunteers were told to randomly walk around a large hall without talking to each other. A select few were then given more detailed instructions on where to walk. The scientists discovered that people end up blindly following one or two instructed people who appear to know where they are going. The results of this experiments showed that it only takes 5% of confident looking and instructed people to influence the direction of the 95% of people in the crowd, and the 200 volunteers did this without even realizing it.[3]

Researchers from Hebrew University, NYU, and MIT explored herd mentality in online spaces, specifically in the context of "digitized, aggregated opinions".[4] Online comments were given an initial positive or negative vote (up or down) on an undisclosed website over five months.[5] The control group comments were left alone. The researchers found that "the first person reading the comment was 32 percent more likely to give it an up vote if it had been already given a fake positive score".[5] Over the five months, comments artificially rated positively showed a 25% higher average score than the control group, with the initial negative vote ending up with no statistical significance in comparison to the control group.[4] The researchers found that "prior ratings created significant bias in individual rating behavior, and positive and negative social influences created asymmetric herding effects".[4]

“That is a significant change”, Dr. Aral, one of the researchers involved in the experiment, stated. “We saw how these very small signals of social influence snowballed into behaviors like herding.”[5]

Wikiquote has quotations related to: Herd mentality

• The Wisdom of Crowds and Iowa Electronic Market Statistics