RG

IN CONTEXT

FOCUS

Business behavior

KEY DATES

1841 Scottish journalist Charles MacKay documents herd behavior in his book, Extraordinary Popular Delusions and the Madness of Crowds.

1992 Indian economist Abhijit V. Banerjee publishes A Simple Model of Herd Behaviour.

1995 In “Herd Behaviour, Bubbles and Crashes,” German professor Thomas Lux claims prices and sentiment affect one another, so feelings of the herd affect prices (for example, faith in the housing market pushes up prices).

2001–06 The housing bubble in the US and parts of Europe gathers pace before collapsing in the 2007–08 financial crisis.

The herd instinct is clear in nature and just as clear ...

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