If you’ve ever watched a nature show about herding animals, you may have seen what a stampede looks like, that sudden chaotic movement when a herd of animals panics and begins to break in every direction. Stampedes aren’t planned events, but they tend to affect the whole herd, and they can lead to fairly disastrous results such as animals injured or trapped. A stampede may also have positive results, like most of the animals escaping a predator, which thus protects the herd’s survival.
These unplanned incidents are called herd behavior, and the term has been applied to many aspects of human culture. Though we may think we’re individuals, groups of people may act in concert, especially in situations that leave little time for decision making. Like the herd stampeding, herd behavior in humans may have negative or positive consequences.
The term herd behavior as it applies to humans first appears in Dr. Wilfred Trotter’s 1914 book Instincts of the Herd in Peace and War. It wasn’t exactly a new idea, though Trotter can be credited with the phrase. Sigmund Freud, for instance, extensively discusses his ideas of crowd psychology, and Carl Jung suggests that such psychology is the result of universal or collective unconscious.
You may see many examples of herd behavior in economics. For instance, if a few people begin to sell a certain type of stock, it may lead to a mass selling spree, and panic, and leave the market open to crashing. Similarly, you might look at the behavior in the retail environment on day after Thanksgiving sales. People have been injured in attempting to get to a special item offered at a very good price, when the doors of a store opens and the crowd stampedes in. Such stampedes have also occurred at rock concerts with open seating, where all people try to rush to get the closest seats to the front. These have occasionally had tragic results.
One aspect of herd behavior that is often noted is that the herd is not completely interested in protection of the group. Instead self-interest is a primary motivator. Herd animals, when they fear a predator work to get into the center of the herd so they are less vulnerable, just as people have only self-interest in mind when they knock over others to get to a cheaply sold item, or the front seats of a rock concert; or even more so when they start selling or purchasing stocks to either make a profit or make an investment that will prove profitable in the very near future.
Such things as housing prices can be determined by herd behavior and may be augmented by reports. In 2007 the Santa Rosa, California Press Democrat featured an angry letter to the editor asking them to please not write anything else on the declines in the housing market. The writer was concerned that continued reports were driving the price of his own house down; in other words he feared the herd instincts of others who would panic and try to sell before home prices dropped more, which would only lead to a drop in home prices and a flooded market.
Herd behavior may be called by other names like “mob mentality.” It is sometimes used disparagingly, as the term “mob” typically conjures up an image of a disorganized, aggressive, panicked group of people. A sudden crisis or a demonstration that gets out of order may be subject to humans “herding” into violent clashes with others. More simply a large group of people herding into a single area can produce panic and stampeding, riots, violence, and huge death tolls.
The study of group behavior can analyze situations to see where, when, and why they went wrong. Stock market crashes, for example, can be precipitated by mob mentality, as people start to panic in response to fluctuating markets. The evacuation of the Titanic, in which a small fraction of the available lifeboat space was utilized, is another great example of mob mentality, illustrating the need for organized evacuation plans and drills so that people know what to do in an emergency.
Benign herding behaviors may be frequent in everyday decisions based on learning from the information of others, as when a person on the street decides which of two restaurants to dine in. Suppose that both look appealing, but both are empty because it is early evening; so at random, this person chooses restaurant A. Soon a couple walks down the same street in search of a place to eat. They see that restaurant A has customers while B is empty, and choose A on the assumption that having customers makes it the better choice. And so on with other passersby into the evening, with restaurant A doing more business that night than B. This phenomenon is also referred as an information cascade.
