-based predictions for how information risk and market stress influence aggregate herding intensity. We test these predictions … sell herding. The model also explains why buy, not sell, herding is more pronounced during the financial crisis. …

This paper sheds new light on the impact of information risk and market stress on herding of institutional traders from … herding intensity should increase with information risk. Market stress should affect herding asymmetrically: while there is … more sell herding when the market becomes more pessimistic and more uncertain, buy herding intensity should decrease. We …

Exiting studies document that institutional herding has a stabilizing effect on stock prices, as stock returns over one …- to three-quarter horizons are positively correlated with herding. The literature also shows that short-term institutions … herding. Our results show that herding by short-term institutions promotes price discovery. In contrast, herding by long …