{
  "title": "Herd Behavior in Financial Markets: A Review",
  "publication": "IMF Working Papers, March 1, 2000",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/herd-behavior-in-financial-markets-a-review-3487",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2016/12/30/herd-behavior-in-financial-markets-a-review-3487",
  "overlayPath": "/en/publications/wp/issues/2016/12/30/herd-behavior-in-financial-markets-a-review-3487/index.md",
  "summary": "Policymakers often express concern that herding by financial market participants destabilizes markets and increases the fragility of the financial system. This paper provides an overview of the recent theoretical and empirical research on herd behavior in financial markets.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- Policymakers often express concern that herding by financial market participants destabilizes markets and increases the fragility of the financial system.\n- The paper provides an overview of recent theoretical and empirical research on herd behavior in financial markets.\n- It addresses the following questions:\n  - What precisely do we mean by herding?\n  - What could be the causes of herd behavior?\n  - What success have existing studies had in identifying such behavior?\n  - What effect does herding have on financial markets?\n- Disclaimer: \"This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.\""
    },
    {
      "heading": "Key themes and topics covered",
      "content": "- Asset and liability management\n- Asset prices\n- Asset valuation\n- Financial institutions\n- Financial markets\n- Mutual funds\n- Pension spending\n- Prices\n- Stock markets\n- Stocks"
    },
    {
      "heading": "Keywords highlighted by the paper",
      "content": "- adverse selection\n- agent investor\n- Asset prices\n- Asset valuation\n- benchmark investor\n- company stock\n- financial markets\n- herd behavior\n- investors H\n- large cap\n- momentum strategies\n- mutual fund\n- Mutual funds\n- non-resident investor\n- profit-maximizing investor\n- research effort\n- risk-averse investor\n- Stock markets\n- Stocks\n- type D investor\n- type f investor\n- WP\n\n---\n\n Content in this bundle\n\n- Herd Behavior in Financial Markets:  A Review - WP/00/48\n  - Herd Behavior in Financial Markets:  A Review - WP/00/48 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Herd Behavior in Financial Markets:  A Review - WP/00/48 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/herd-behavior-in-financial-markets-a-review-3487"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2016/12/30/herd-behavior-in-financial-markets-a-review-3487/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2016/12/30/herd-behavior-in-financial-markets-a-review-3487/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2016/12/30/herd-behavior-in-financial-markets-a-review-3487/bundle-manifest.json)",
    "Authors: Sunil Sharma, Sushil Bikhchandani",
    "Published: March 1, 2000",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451846737.001",
    "Policymakers often express concern that herding by financial market participants destabilizes markets and increases the fragility of the financial system.",
    "The paper provides an overview of recent theoretical and empirical research on herd behavior in financial markets.",
    "It addresses the following questions:",
    "Disclaimer: \"This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.\"",
    "Asset and liability management",
    "Asset prices",
    "Asset valuation",
    "Financial institutions",
    "Financial markets",
    "Mutual funds",
    "Pension spending",
    "Prices",
    "Stock markets",
    "Stocks",
    "adverse selection",
    "agent investor",
    "Asset prices",
    "Asset valuation",
    "benchmark investor",
    "company stock",
    "financial markets",
    "herd behavior",
    "investors H",
    "large cap",
    "momentum strategies",
    "mutual fund",
    "Mutual funds",
    "non-resident investor",
    "profit-maximizing investor",
    "research effort",
    "risk-averse investor",
    "Stock markets",
    "Stocks",
    "type D investor",
    "type f investor",
    "WP",
    "**Herd Behavior in Financial Markets:  A Review - WP/00/48**"
  ],
  "related": [
    {
      "title": "Herd Behavior in Financial Markets:  A Review - WP/00/48",
      "role": "document",
      "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2000/_wp0048.pdf",
      "summary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2000/_wp0048.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2000/_wp0048.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2016/12/30/herd-behavior-in-financial-markets-a-review-3487/index.md",
    "json": "/en/publications/wp/issues/2016/12/30/herd-behavior-in-financial-markets-a-review-3487/index.json",
    "bundleManifest": "/en/publications/wp/issues/2016/12/30/herd-behavior-in-financial-markets-a-review-3487/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-17T06:35:44.388Z"
}