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7.1 Herd Behavior 181
Information
Diffusion
Explicit
Network
Global
Information
Network
Observability
Information
Availability
Herd
Behavior
Information
Cascades Diffusion ofInnovationsEpidemics
Local
Information
Implicit
Network
Figure 7.1. Information Diffusion Types.
whether to become infected or not and infection is considered a random nat-
ural process, as long as the individual is exposed to the pathogen. Figure7.1
summarizes our discussion by providing a decision tree of the information
diffusion types.
7.1 Herd Behavior
Consider people participating in an online auction. Individuals are con-
nected via the auction’s site where they cannot only observe the bidding
behaviors of others but can also often view profiles of others to get a feel
for their reputation and expertise. Individuals often participate actively in
online auctions, even bidding on items that might otherwise be considered
unpopular. This is because they trust others and assume that the high num-
ber of bids that the item has received is a strong signal of its value. In this
case,herd behaviorhas taken place.
Herd behavior, a term first coined by British surgeon WilfredTrotter
[1916], describes when a group of individuals performs actions that are
aligned without previous planning. It has been observed in flocks, herds
of animals, and in humans during sporting events, demonstrations, and
religious gatherings, to name a few examples. In general, any herd behavior
requires two components:
- connections between individuals
- a method to transfer behavior among individuals or to observe their
behavior