Herding: An Interdisciplinary Integrative Review from a Socionomic Perspective

Herding is one of the most important concepts in cognitive economics, especially as applied to financial markets. This paper presents an interdisciplinary integrative literature review of the herding concept, discusses the salient differences between different ways of conceptualizing herding, and argues for the advantages of the socionomic perspective on herding, a new theory that sees herding as a process having evolutionary, prerational and predictable aspects. The paper first summarizes the literature regarding diverse theoretical approaches to the concept of herding: social psychological approaches; information theory and cybernetic approaches; ethological and biological approaches; econophysics approaches; medical model approaches; and the socionomic model. The paper categorizes these theories according to several theoretical distinctions: Evolutionary component or not; Assumes context of uncertainty or not; Model of agents as homogeneous or heterogeneous; Herding dynamics seen as endogenous or exogenous;