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Herd behaviour and the housing bubble and collapse

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If you believe this was accurate and useful plz rate or vote it. If you think something was wrong or missing plz post it as comment. Why do you think this might be the case? As the group of the size increases group will follow certain norms. Thus the member is susceptible to conforming to the group norms. Every individual try to compare with other group members and try to be equal with them.

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As a result, increase herd behavior as group increases. What is the upside of such behavior? In certain ways pack behavior have benefits. Pack behavior was seen most commonly in an exclusive circle of people with a common purpose. Leader will have more responsibilities with in the pack and about the pack. Leader will make every one herd behaviour and the housing bubble and collapse in the pack.

Shiller argues that herd behavior can go both ways: It explains the housing bubble, but it also explains the bust.


As they see others bidding down home prices to abnormally low levels. Yes I agree with Shiller. In other way if any good news about a company was reported in the news then people start buying the company shares which will drive up the stock price. How might organizations combat the problems resulting from heard behavior? Herd behavior in organizations was mostly seen in groups. If any one in group are lazy or inept, then seeing them others will also reestablish equality by reducing there effort.

As if all individuals in whole group reduce there effort, productivity will reduce.