An Individual Herding Behavior Model: The Role of Personality, Gender and Information Asymmetry

DOI

10.2991/icoi-19.2019.109How to use a DOI?

Keywords

behavioral finance, conscientiousness, gender, herding behavior, information asymmetry, market condition, neuroticism

Abstract

Herding behaviour is one of the efficient market hypothesis anomalies. Investors display such behaviour when they imitate the actions of other investors; the behaviour occurs when there is constant interaction between rational investors, which prevents them from seeking information about market fundamentals. Herding behaviour arises because investors do not act in accordance with their private information, but refer to other investors’ decisions. As a result, the process of social learning stops. Information asymmetry is claimed to be responsible for the emergence of such behaviour. Extensive literature and empirical studies have proven its existence in financial markets; however, the majority of these studies examined herding behavior in institutional contexts, or in terms of overall market movements. No studies have examined individual motivation for such behaviour. This paper builds a new model of individual herding behaviour to fill the lack of theory about such motivation. Aspects of personality, namely conscientiousness and neuroticism, together with gender, are important factors that affect the relationship between the asymmetry of information and herding behaviour.

Copyright

© 2019, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Puput Tri Komalasari
AU  - Marwan Asri
PY  - 2019/10
DA  - 2019/10
TI  - An Individual Herding Behavior Model: The Role of Personality, Gender and Information Asymmetry
BT  - Proceedings of the 2019 International Conference on Organizational Innovation (ICOI 2019)
PB  - Atlantis Press
SP  - 624
EP  - 629
SN  - 2352-5428
UR  - https://doi.org/10.2991/icoi-19.2019.109
DO  - 10.2991/icoi-19.2019.109
ID  - Komalasari2019/10
ER  -