| Author: | Effinger, M. R. Polborn, M. K. |
| Title: | Herding and anti-herding: A model of reputational differentiation |
| Journal: | European Economic Review
2001 : MAR, VOL. 45:3, p. 385-403 |
| Index terms: | STRATEGY CAREERS MODELS |
| Language: | eng |
| Abstract: | The authors analyze a model related to the strategic herding literature where a second expert maximizes his expected second period value by conforming with a first expert ('herding'). In contrast to the herding literature the authors 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. After the introduction the authors present their model. In this model, smart experts' signals are perfectly correlated and dumb experts' signals are uncorrelated, as in the standard herding models. The main results are given in section 3, and some extensions are discussed in section 4. |
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