Herding Behavior

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August 31, 2024 3 min read Definitions
Herding Behavior: The Tendency of Investors to Follow and Mimic the Actions of a Larger Group
Finance Behavioral Economics Herding Behavior Investors Market Psychology Financial Markets Behavioral Finance
Herding Behavior in finance describes the tendency of investors to follow and mimic the actions of a larger group, often ignoring their own individual analysis and decision-making processes. This behavior can significantly impact financial markets, leading to price fluctuations and contributing to market bubbles and crashes.
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