Herding in the financial market24.03.2017
I am currently working on writing a review of the current state of research on the determinants of herding. The study of herding in the financial market is conducted not only by economists but also by psychologists and behavioral economists. The different disciplines use varying methodologies and (as a consequence) diverse operationalizations of herding. My review is supposed to combine empirical studies from the three disciplines to find a definition of herding that can be used in future studies as base for the planning of study designs. In particular, I will provide an overview of the published empirical findings on facilitating and inhibiting influences on herding. The diversity of this collection of empirical studies and their findings brings along substantial methodological discrepancies. To integrate the results yielded by different methodologies is one of my main aims. Moreover, by collecting these different studies I will develop a pool of creative approaches which future research can draw upon.
The review is still in progress: While the comparison of definitions have turned out very informative, the comparison of methods and data for the development of reliable effect size calculations continues to be a serious challenge. .