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Study Notes

Herd Behaviour (Behavioural Economics)

AS, A-Level
AQA, Edexcel, OCR, IB

Last updated 21 Mar 2021

We are herd animals and we often make decisions based in part on who is around us and the choices they make.

Behavioural Economics - Herd Behaviour

Examples of herd behaviour might include:

  • Choosing items off a menu in a restaurant when part of a group
  • Herd behaviour of investors in financial markets - e.g. a stampede to sell when prices start falling
  • Binge drinkers going on holiday with each other
  • Fanatical supporters of football clubs

Herd behaviour reminds us that most decisions are taken in a social context.

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