Herding
Herding is when forecasters copy the crowd or market consensus rather than independent reasoning. It can reduce crowd wisdom and hide true skill differences.
Definition
Herding is the tendency to follow the crowd. In forecasting, it often means pushing your probabilities toward market consensus mainly because it is “safe”, not because your evidence supports it.
Why it matters
Herding can make individual scores look less differentiated and can reduce the benefits of crowd wisdom. If everyone converges to the same number, the market becomes less informative about alternative views.
How it shows up
• forecasts clustered near the same values
• low dispersion even when new information arrives
• high agreement but weak resolution
Related
Herding interacts with selection bias and can affect how you interpret performance versus a consensus benchmark.