Herding and anti-herding: A model of reputational differentiation

Matthias R. Effinger, Mattias K. Polborn

Research output: Contribution to journalArticlepeer-review

Abstract

We analyze a model related to the strategic herding litetature where a second expert maximizes his expected second period value by conforming with a first expert ('herding'). In contrast to the herding literature we assume that an agent is most valuable if he is the only smart agent. If the value of being the only smart agent is sufficiently large, the second expert always opposes its predecessor's report; otherwise, herding may result.

Original languageEnglish (US)
Pages (from-to)385-403
Number of pages19
JournalEuropean Economic Review
Volume45
Issue number3
DOIs
StatePublished - Apr 28 2001

Keywords

  • Career concerns
  • Herding
  • Strategic communication

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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