We highlight herding of investors as one major risk factor that is typically ignored in statistical approaches to … portfolio modelling and risk management. Our survey focuses on smart-beta investing where such methods and investor herding seem … modelling herding risk which merit empirical analysis. This financial economists' perspective supplements the vast statistical …

tie these features together in a model of banks' herding behavior. Most existing models of herding behavior can explain … the other hand, many models that try to explain excessive risk-taking do not contain any incentive for herding. This paper … develops astate-preference model of simultaneous herding and excessive risktaking. Thus, the model can help in understanding …