Following the Crowd: Psychological Drivers of Herding and Market Overreaction

Erscheinungsjahr 2025
ISBN: 978-981-950791-7
Verlag: Springer

Buch, Englisch, 231 Seiten, Format (B × H): 160 mm x 241 mm, Gewicht: 551 g

This book delves into a comprehensive exploration of herding and market overreaction combining psychological insights to understand why investors follow the crowd and the investment tips of others. It delves into foundational theories of behavioral finance, examining cognitive biases and emotional factors that drive collective behavior in financial markets. Through detailed case studies, including the 1998 Long-Term Capital Management Collapse, the 2015 Chinese Stock Market Crash, and the 2021 Meme Stock Phenomenon, the book offers real-world examples of herding impacts. It discusses the role of social media and technology, such as AI and machine learning, in shaping investor behavior and provides a global perspective on market reactions across different cultures. Additionally, the book explores regulatory implications and future trends in behavioral finance, making it an essential resource for academics, finance professionals, and advanced students seeking to understand the psychological underpinnings of financial markets.

Zielgruppe

Research

Autoren/Hrsg.

Ooi, Kok Loang

Binti Ab Aziz, Norazlin

Lau, Wee Yeap

Fachgebiete

• Mathematik | Informatik EDV | Informatik Informatik Künstliche Intelligenz
• Wirtschaftswissenschaften Finanzsektor & Finanzdienstleistungen Finanzsektor & Finanzdienstleistungen: Allgemeines
• Wirtschaftswissenschaften Volkswirtschaftslehre Volkswirtschaftslehre Allgemein Verhaltensökonomik

Inhaltsverzeichnis

1. The Psychology of Herding.- 2. Market Overreaction Explained.- 3. The Cost of Following the Crowd.- 4. Psychological Drivers of Herding.- 5. Types of Herding Behaviour.- 6. Digital Herding and Technology’s Role.- 7. Rational Vs. Irrational Herding.- Herding’s Hidden Risks and Rewards.- 9. Cognitive Biases and Market Reactions.- 10. Emotions and Overreaction.- 11. Identifying Overreaction in Markets.- 12. Strategies to Avoid Overreaction.- 13. Cultural Influences on Overreaction.- 14. The Psychology of Greenwashing And ESG Disclosures.- 15. The Psychology of Greenwashing and Investor Perception.- 16. The Role of Sustainable Finance in Market Stability.- 17. The Future of Behavioural Finance in a Sustainable World.

Über Autor(innen)

Mark Ooi is a renowned expert in behavioral finance and capital markets, currently serving at the University of Malaya (UM) in the Department of Finance, Faculty of Business and Economics. He holds a Master's degree in Finance and a PhD in Behavioral Finance from Universiti Sains Malaysia (USM), and a Master's degree in Law from the International Islamic University Malaysia (IIUM). Additionally, he is a US Certified Internal Auditor (CIA) with professional experience as an auditor at KPMG. Dr. Ooi has published multiple articles in high-impact SSCI and top-tier Scopus journals and serves as a reviewer in the field of behavioral finance. With an H-index of 13 within just three years, his academic contributions are complemented by his tenure as Deputy Dean at a prestigious private university and his active involvement in research and professional organizations, making him a leading figure in the study and application of behavioral finance.

Wee Yeap Lau is Professor at the Faculty of Business and Economics, academic board member of the Asia-Europe Institute (AEI), and researcher at the Malaysia-Japan Research Centre (MJRC), Universiti Malaya. He was an Asian Universities Alliance (AUA) Scholar at UAE University and Visiting Scholar under National Taiwan Library Fellowship in 2024He previously served as Deputy Dean (Postgraduate) of the Faculty of Economics and Administration (2020-21), and Head of Department (Applied Statistics) for two terms (2013-14 and 2021). Apart from lecturing Statistics and Econometrics at FEA since 2006, he was invited to teach MBA and undergraduate classes in International Finance and Financial Econometrics at the Faculty and Graduate School of Business (GSB), University of Malaya, and both MBA and undergraduate courses in Economics, Malaysian Economy and Financial Management at the International University of Malaya-Wales (IUMW) between 2009 and 2010.

Norazlin Binti Ab Aziz has a diverse background in unit trust industry spanning legal and compliance, marketing and business development, and project management. She holds a Bachelor of Economics (Hons) from the International Islamic University of Malaysia, a Master of Economics from the University of Malaya, and a PhD in Accounting & Finance from the University of Glasgow. Her doctoral research explored Islamic finance, focusing on the intersections of the Islamic capital market, political economy, social theories, and sentiment analysis. She is currently serves as a senior lecturer in the Faculty of Business and Economics at University of Malaya.