Volume 29, Issue 1
DOI: 10.24205/03276716.2020.44
APPLICATION OF CROWD THOUGHT AND HERD BEHAVIOR IN ECONOMIC INVESTMENT
Abstract
The human psychology and behavior have a nonnegligible impact on the economic investment process. This paper mainly investigates the impacts of crowd thought and herd behavior on economic investment. First, it is assumed that the investors with herd behavior have a lower return than those without that behavior. Then, several surveys were carried out on the mentality, behavior and returns of Chinese investors. The results show that the investors with herd behavior do not necessarily have a poor return, falsifying the hypothesis; slight herd behavior leads to greater return on investment, but blind herd behavior only suppresses the return; the herd behavior is rooted in investors’ uncertainty about information. The research results help to improve the economic investment and investors’ psychology.
Keywords
Economic Investment, Mental Feelings, Crowd Thought, Herd Behavior, Return Rate.