Photographer: Brendon O'Hagan/Bloomberg

Odd Lots: What Mathematical Models of Herding Cows Can Teach Us About Markets

Investors go 'moo.'
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Every week, hosts Joe Weisenthal and Tracy Alloway take you on a not-so-random walk through hot topics in markets, finance, and economics.

Investors are often said to exhibit herding behavior when they follow each other into crowded positions — creating market bubbles that are susceptible to sudden pops when everyone begins stampeding for the exit.

This week we take the analogy literally and speak to three professors who have created a mathematical model to examine why cows synchronize their behavior and — crucially — why they stop.

Jie Sun, Erik Bollt, and Mason Porter, the authors of "A Mathematical Model for the Dynamics and Synchronization of Cows," extrapolate their findings to humans and modern markets. This episode is co-hosted by our resident cow expert, Lorcan Roche-Kelly.

 

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