Week6_Assignment - because, for example if you are one...

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Jonathan Sullivan 8/15/10 Week 6 Assignment: Herd Behavior and The Housing Bubble (and Collapse) Page: 307 #’s 1-4 1. Herd behavior increases as the size of the group increases because; by nature it is in our genetics to follow the herd and to not be left behind. But as the size of the herd increases so does the severity of the issue. For example, if you’re best friend bought a new car and then you started to do research on buying a new car but were not quite sure about it. Next thing you know ten of your other friends just bought a new car so instinctively you get yourself a new car too. 2. The benefits of pack behavior include but are not limited to having safety in numbers. Sticking together as one will ensure the safety of your actions and or inactions. 3. Yes, I do agree with Shiller’s opinion that herd behavior can go both ways
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Unformatted text preview: because, for example if you are one mammoth in a large pack or herd that decides it is a good idea to charge of a cliff it could be a really tragedy for you. Whereas if you were to lead the rest of the pack of the cliff with you in a charge then it could spell disaster for the entire herd. 4. I believe that in order for organizations to combat the problems resulting from herd behavior the government would have to get involved that way strict rules could be enforced that would prevent herd behavior problems from ever happening in the first place. Take the housing crisis for example, if the government would have had stricter laws in placed upon the banks that dictated who and how banks were to loan out money then the whole catastrophe could have been stopped....
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This note was uploaded on 02/15/2011 for the course NCM 545 taught by Professor Matter during the Spring '11 term at DeVry Oak Brook.

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