Navigating the herd: a bibliometric examination of investor psychology in financial markets

The concept of 'herding behavior' in finance, characterized by individuals mimicking the actions of others, has gained prominence following major financial crises like the Dot-com bubble, Global Financial Crisis, Euro Zone Crisis, and the Covid-19 Pandemic (Chakraborty 2023; Hasan, Tunaru, and Vioto 2023; Jiang et al. 2022; Batmunkh et al. 2020; Chiang and Zheng 2010). Often, this behavior involves overlooking personal information in favor of following the crowd (Erdenetsogt and Kallinterakis 2016; Kurz and Kurz-Kim 2013), leading to market inefficiencies and mispricing (Alhaj-Yaseen and Yau 2018; Bikhchandani and Sharma 2000; Blasco, Corredor, and Ferreruela 2012; Cakan et al. 2019; Nofsinger and Sias 1999). Academically termed as 'animal spirits' (Avery and Zemsky 1998), this collective behavior often disregards rational evidence, particularly during uncertain times, leading to heightened market volatility and potential market bubbles. Understanding herding behavior is thus crucial for financial analysts, researchers, and policymakers.

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