An empirical application of herding behavior and compliance in the COVID‐19 crisis.

There is evidence that individuals engage in herding behavior in diverse settings, ranging from fashion choices to financial markets. By examining the exogenous shock caused by the outbreak of COVID‐19 and unique data measuring the footfalls in downtown Jönköping, Sweden, we empirically assess how i...

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Publicado en:Kyklos Vol. 77; no. 2; pp. 428 - 458
Autores principales: Nilsson, Helena, Backman, Mikaela
Formato: Artículo
Publicado: Wiley-Blackwell May2024
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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        atl: An empirical application of herding behavior and compliance in the COVID‐19 crisis.
      aug:
        au:
          Nilsson, Helena
          Backman, Mikaela
        affil:
          Center of Entrepreneurship and Spatial Economics (CEnSE), Jönköping International Business School, Jönköping, Sweden
          Institute of Retail Economics, Stockholm, Sweden
      su:
        Sweden
        COVID-19 pandemic
        Herding
        Animal herds
        Financial markets
        Regression analysis
      sug:
        subj:
          COVID-19 pandemic
          Sweden
          Securities and Commodity Exchanges
          Investment Banking and Securities Dealing
          Herding
          Animal herds
          Financial markets
          Regression analysis
      ab: There is evidence that individuals engage in herding behavior in diverse settings, ranging from fashion choices to financial markets. By examining the exogenous shock caused by the outbreak of COVID‐19 and unique data measuring the footfalls in downtown Jönköping, Sweden, we empirically assess how individuals respond to the restrictions imposed by the government and to the behavior of others, that is, herding. To this end, a regression discontinuity analysis with time as the running variable is applied. We find a negative effect of the restriction on footfalls, indicating that individuals follow the imposed governmental restrictions. However, we also find indications that individuals imitate the actions of others and engage in herd behavior even when the cost of doing so is very high; that is, it could result in severe illness or even death. With the use the unique setting of Sweden, where there have been no enforced lockdowns, we contribute with knowledge related to how effective voluntary restrictions are and the influence of others on one's decision making. Although the nature of the studied sample limits the external generalizability of the results, it may offer guidance for future interventions in clearly delineated settings.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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