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The purpose of this paper is to identify herding behaviour on financial markets and measure the herding behaviour impact on the accuracy of analysts' earnings forecasts.

Two alternative measures of herding behaviour, on analysts' earnings forecasts are proposed. The first measure identifies herding as the tendency of analysts to forecast near the consensus. The second measure identifies herding as the tendency of analysts to follow the most accurate forecaster. This paper employs the method of The Generalised Method of Moments in order to relax any possible biases.

In both measures employed, a positive and significant relation is found between the accuracy of analysts' earnings forecasts and herding behaviour. According to the first measure analysts exhibit herding behaviour by forecasting close to the consensus estimates. According the second herding measure, it is found that analysts tend to herd towards the best forecaster at the time. Finally, it is concluded that the accuracy of analysts' forecasts increases as herding increases.

The present study triggers concerns for further research in the modelling of analysts' forecasting behaviour.

This paper proposes that a measure based on human biases is the best way to estimate and predict the analysts' earnings forecast future accuracy.

This study is concerned with markets operating in Turkey in the Istanbul Stock Exchange (BIST), which have been observed and studied in relation to herd behavior. During the research part of the study, the existence of herd behavior was investigated with the help of the daily closing price data of the firms in BIST between January 2011 and December 2017. In the research section of the study, the authors used regression analysis. In the analysis, the authors used the index value of the BIST whole Index. The average value of the index value of BIST whole Index was taken. Then, according to this average, 1% percentile and 5% percentile were taken. In the periods in the 1% percentile (at the dates) the result was that herd behavior was present. The herd behavior was observed for the periods (for dates) included in the percentile of 1%. On the other hand, the results of the analysis for the 5% percentile show that the herd behavior is only seen in the upper extremes.

The non-fungible token (NFT) market had undergone dramatic growth and a sudden decline during 2021–2022. The market experienced a surge in prices in late 2021 and early 2022, with NFTs being sold at inflated prices. Despite this, by April 2022, the market underwent a correction, and the prices of NFTs returned to more reasonable levels. This can be a result of imitating the actions or judgments of a larger group, which is not systematically proven yet. Therefore, this study systematically investigates the applicability of herding behavior in the NFT market.

This research employs cross-sectional absolute deviation (CSAD) of returns and ordinary least squares (OLS) to test herding behavior with moving time windows of 10, 20 and 30 days based on the sales data collected from public interface of OpenSea between July 1, 2021 and June 30, 2022. Additionally, NFT-related keyword usage analysis is done for the detected herding periods.

As per the results of the data analyzed, herding behavior was evidenced using 10-, 20- and 30-day time windows from July 1, 2021 to June 30, 2022because of media movement. The findings revealed that this behavior was present and aligned with the overall behavior of the market.

This study introduces CSAD to examine herding behavior patterns within the NFT market. Complementing this method, keyword count-based analysis is employed to identify the underlying causes of herding behavior. Through this comprehensive approach, this study not only uncovers the roots of herding behavior but also offers an assessment of the time windows during which it occurs, considering the plausible socioeconomic contexts that influence these trends.

This paper aims to examine the presence of herd behaviour in the Islamic Gulf Cooperation Council (GCC) stock markets following the methodology given by Chiang and Zheng (2010). Generalized auto regressive conditional heteroskedasticity (GARCH)-type models and quantile regression analysis are used and applied to daily data ranging from 3 January 2010 to 28 July 2016. Results show evidence of herd behaviour in the GCC stock markets. When the data are divided into down and up market periods, herd information is found to be statistically significant and negative during upward market periods only. These results are similar to those reported in some emerging markets such as China, Japan and Hong Kong, where stock returns perform more similarly during down market periods and differently during rising markets.

The authors present a brief literature on herd behaviour. Second, the authors provide some specificity of the GCC Islamic stock market, followed by the presentation of the methodology and the data, results and their interpretation.

The authors take into account the difference existing in market conditions and find evidence of herding behaviour during rising markets only for GCC markets. This result was confirmed after using the quantile regression method, as evidence of herding was observed only in highly extreme periods. Stock returns perform more similarly when market is down in Islamic GCC stock market.

The research limitation consists in the fact that this work can be extended to compare the GCC stock markets with other markets in Asia such as Malaysia and Indonesia.

The principal implication consists in the fact that herding behaviour is limited in the GCC markets and Islamic finance can have an important contribution to moderate the behaviour in the financial markets.

The work focusses on the role of ethics in the financial markets and their ability to reduce the impact of behavioural biases.

The paper studies the behaviour of investors in the Islamic financial markets and gives an idea about the importance of the behaviour in this particular market regarding its characteristics.

Purpose – The aggregate investment by foreign institutional investors (FIIs) in the Indian stock market is significant compared to that by domestic institutions and individual (retail) investors. The question of whether FIIs exhibit herding and positive feedback trading while investing in the Indian stock markets has not been examined so far. This study is an attempt to fill the gap and contribute to the existing evidence on foreign portfolio investment in India.

Methodology/approach – We have analyzed the daily data on purchases and sales of securities by FIIs sourced from the Securities and Exchange Board of India (SEBI), and the Bombay Stock Exchange (BSE). We have adopted the approach of Lakonishok et al. (1992), and Wermers (1999) to examine herding and positive feedback trading by foreign investors.

Findings – Our results suggest that FIIs exhibit herding and positive feedback trading during different phases of the stock market. This observed behavior is prominent in but not restricted to large cap stocks as they enjoy better liquidity.

Social implication – The herding and positive feedback trading by FIIs is a cause for concern for government of India, capital market regulator (SEBI), and the country's central bank (RBI) as it adversely affects stock prices and volatility. They are required to formulate and implement a suitable policy response given their objective of protecting the interests of small investors in the market. They may also have to monitor the purchases and sales of equities by FIIs in general and of better performing large cap stocks in particular.

The purpose of this paper is to identify the implications of managerial herding for investors’ wealth and capital allocation across funds, and the critical role played by fund governance in monitoring herding incentives.

The author adopt the fund herding measure first proposed by Grinblatt et al. (1995) over the long sample period 1992-2007. Univariate and multivariate tests are then constructed to examine the relationship between managerial herding, performance, and investors’ sensitivities. OLS, fixed-effect panel data models are utilized to conduct the tests.

The author show that managers that do not herd have above-average managerial skills, trade less on noise, and significantly outperform herding managers. The author also illustrate that although fund herding could be used as a signal of managerial quality, underperforming herding funds manage to survive in equilibrium, indicating that investor flows do not adequately respond to the information content of a persistent herding behavior. Finally, the author demonstrate that better governance in the form of stronger managerial incentive schemes constitutes a significant deterrent against detrimental herding strategies, representing an effective monitoring device of the response of fund managers to poor flow-performance sensitivity.

The paper provides original evidence on the efficacy of external and internal governance in deterring wealth-reducing herding strategies. The author document that where more effective managerial incentives schemes are put in place by the management companies, fund managers are more likely to be better informed, resulting in fewer incentives to mimic the trading decisions of their peers.

This paper seeks to unravel some of the challenges associated with responsible investment from the institutional investor's perspective, focusing on how dominant conventions influence investor behavior and their ability to invest responsibly.

The research draws from three longitudinal case studies that were carried out on UK institutions that have adopted a responsible investment policy.

Evidence of behavioral obstacles to responsible investing were found, including short‐termism, gravitation towards defensible decisions and reluctance to integrate corporate responsibility factors into the core investment process. Based on the case study evidence these appear to be driven by the influence of prevailing dominant conventions, reinforced by institutional herding tendencies.

The paper introduces some preliminary thoughts as to how conventions might be resisted and changed over time through the institutional herding mechanism. Further research is required (and is currently under way) to more closely examine the potential impact of investor collaboration for challenging dominant conventions.

Collaboration amongst institutional investors is key for mobilizing institutional herding tendencies so that responsible investment might get built into conventions.

The research combines responsible investment literature with behavioral finance studies on investor behavior, herding tendencies and the influence of conventions. It also illuminates the complexities in investor behavior from which other institutional investors might learn in implementing a responsible investment policy.

The purpose of this paper is to evaluate published institutional investor research focused on home bias, disposition effect, and herding behavior in recognized journals and to ascertain some substantial gaps with regard to them.

Recently published studies between 2005 and 2014, which intend to examine behavioral biases on institutional investors, have been reviewed through juxtaposing them under the three fundamental titles and figuring them according to the explanation why these biases occurs.

The research examining home bias has identified the presence of this effect on institutional investors and explained it with information or culture. Yet, the existence of disposition effect has not been found in the extant research. These studies have estimated disposition effect through overconfidence and experience. Also, extant studies have provided evidence of herding behavior, attributing this behavior to pursuing same published information and protecting their reputation and career.

Currently, no study, which reviews and evaluates the empirical research body on behavioral biases displayed institutional investors, exists. To the authors’ knowledge, this is the first paper which highlights the empirical evidence on these bias and summarizes the explanations in these studies for these biases exhibited by institutional investors. This could contribute to the researchers focusing on behavioral biases on institutional investors by providing them with a meaningful figuralization regarding their evidence and explanation.

The purpose of this paper is to provide a review of theory and empirical evidence on herding behavior in financial markets.

Review and discussion of the literature.

More than two decades of empirical and theoretical research have provided a significant insight on investor herding behavior.

The discussion indicates that there are still open issues and areas with inconclusive evidence, e.g. the author knows relatively little for markets other than equity markets.

The paper may need empirical methodologies to evaluate herding that address current limitations.

The paper reviews recent empirical evidence and identifies open issues for future research.

This study aims to determine the causality of herding which was traced down to social and normative influences from first-home buyers represented by undergraduate students.

The Perception Alignment Hypothesis was used in this experimental research, and was conducted on a sample of 125 undergraduates studying finance representing first-home buyers. The experiment provides the subjects property brochures in Surabaya to appraise a value that they see fit for purchase. The subjects were given both social- and normative-induced treatments separately using information cascade, and their valuation shifts were recorded. Their valuations were then divided into three sections under the treatment groups, consisting of initial, “social’ and “normative’ valuations.

In contrast to previous findings, the results showed that first-home buyers succumbed to both social and normative influences, causing them to herd. Further analysis of the credibility of information was conducted and it showed that the undergraduates were only prone to social influence, whereas other aspects regarding normative influences must be further researched.

The decline of homeownership on a global scale is concerning, especially when 60% of the market represents young adults under the age of 35. This implies that both the government and property developers may need to enact strict measures to regulate property purchases.

This is the first experimental study on herding of Surabaya, Indonesia, mainly focusing on human behavior and information cascade. Thus, this study could be a viable reflection to future policies in Indonesia being made to answer actual demands in the residential market.