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Herd Behaviour and Keeping up with the Joneses Andrew Oswald University of Warwick and IZA Bonn

Herd Behaviour and Keeping up with the Joneses Andrew Oswald University of Warwick and IZA Bonn. I would like to understand human imitation and herd behaviour. Today we’ll look at:. Today we’ll look at:. Brain scan evidence. Today we’ll look at:. Brain scan evidence Statistical evidence.

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Herd Behaviour and Keeping up with the Joneses Andrew Oswald University of Warwick and IZA Bonn

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  1. Herd Behaviour and Keeping up with the JonesesAndrew OswaldUniversity of Warwick and IZA Bonn

  2. I would like to understand human imitation and herd behaviour.

  3. Today we’ll look at:

  4. Today we’ll look at: Brain scan evidence

  5. Today we’ll look at: Brain scan evidence Statistical evidence

  6. Today we’ll look at: Brain scan evidence Statistical evidence The mathematics of herd behaviour

  7. The distribution of life-satisfaction levels among British people N = 74,481

  8. The classic herding article:

  9. Hamilton, W. D. (1971). "Geometry for the Selfish Herd". Journal of Theoretical Biology 31 (2): 295–311.

  10. Hamilton, W. D. (1971). "Geometry for the Selfish Herd". Journal of Theoretical Biology 31 (2): 295–311. MSc L.S.E.

  11. Why does herding happen?

  12. Why does herding happen?

  13. When a T Rex dinosaur comes in the room, it is your relative position that matters.

  14. So suggested: • Hamilton, W. D. (1971). "Geometry for the Selfish Herd". Journal of Theoretical Biology 31 (2): 295–311.

  15. Before that article, the standard theory in biology was that herds had some inexplicable communitarian instinct.

  16. Instead, Hamilton argued:

  17. Instead, Hamilton argued: A rational animal clusters with the others –

  18. Instead, Hamilton argued: A rational animal clusters with the others – because its relative position is what matters.

  19. The herd instinct even seems to exist in baby animals who have never seen a predator.

  20. Title: Predatory threat induces huddling in adolescent rats and residual changes in early adulthood suggestive of increased resilience Author(s): Kendig Michael D.; Bowen Michael T.; Kemp Andrew H.; et al.Source: BEHAVIOURAL BRAIN RESEARCH Volume: 225 405-41 DEC 1 2011

  21. Kendig et al 2011 Young male rats were exposed to 30 min of cat fur exposure in a large arena.

  22. Cat fur exposure was found to elicit a distinct defensive response in which groups of adolescent rats huddled together in the corner of the arena....relative to control rats.

  23. “Interestingly, huddling was most pronounced in rats receiving intermittent alcohol.”

  24. For biologists and zoologists, this is now the dominant theoretical explanation for herd behaviour.

  25. By contrast

  26. By contrast Most economists who study herd behaviour prefer to view it as ‘informational learning’.

  27. By contrast Most economists who study herd behaviour prefer to view it as ‘informational learning’. Banerjee in the QJE, etc.

  28. Yet fashion is ‘pure’ imitation

  29. Yet fashion is ‘pure’ imitation

  30. So I reckon we need to think about human imitation caused by sheer keeping-up desires*. *even if heavily subconscious

  31. Before getting to equations, let’s start with everyday empirical evidence.

  32. Consider your wrist.

  33. 5 euros

  34. 500000 euros

  35. “A watch defines a man's look and tone.” Rolex advert.

  36. “A watch defines a man's look and tone.” Rolex advert.

  37. Subconsciously, humans seem frightened of falling behind.

  38. So let us hypothesise that human beings care about their relative position.

  39. So let us hypothesise that human beings care about their relative position. Duesenbery, Easterlin, Frank, Hirsch, Layard, Runciman, Veblen, ...

  40. There are now results • From fMRI scans • From statistical work on well-being

  41. This includes new empirical work: Armin Falk and colleagues on relative-income images in the brain (Science, Journal of Public Economics) Peter Kuhn and colleagues on car purchasing by neighbours of lottery winners (AER forthcoming) Ori Heffetz on visible goods (REStats forthcoming). David Card, Alexandre Mas, Enrico Moretti, Emmanuel Saez on peers and satisfaction.

  42. Two papers I would greatly recommend.

  43. Title: Social comparison affects reward-related brain activity in the human ventral striatumAuthor(s): Fliessbach K, Weber B, Trautner P, et al.Source: SCIENCE Volume: 318 Issue: 5854 Pages: 1305-1308 Published: NOV 23 2007

  44. Title: Relative versus absolute income, joy of winning, and gender: Brain imaging evidenceAuthor(s): Dohmen T, Falk A, Fliessbach K, et al.Source: JOURNAL OF PUBLIC ECONOMICS Volume: 95 Issue: 3-4 Special Issue: Sp. Iss. SI Pages: 279-285 Published: APR 2011

  45. We are now able to look inside the brain.

  46. Armin Falk et al

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