Herd Behavior: Beyond the Known Ruinous Role

Abstract

In order to survive, self-serving agents in various complex adaptive systems (CASs) must compete against others for sharing limited resources with biased or unbiased distribution by conducting strategic behaviors. This competition can globally result in the balance of resource allocation. As a result, most of the agents (say, species) can survive well. However, it is a common belief that the formation of a herd in a CAS will cause excess volatility, which can ruin the balance of resource allocation in the CAS. Here this belief is challenged with the results obtained from a modeled resource-allocation system. Based on this system, we design and conduct a series of computer-aided controlled human experiments, including herd behavior. We also perform agent-based simulations and theoretical analyses, in order to confirm the experimental observations and reveal the underlying mechanism. We report that, as long as the ratio of the two resources for allocation is biased enough, the formation of a typically sized herd can help the system to reach the balanced state. This resource ratio also serves as the critical point for a class of phase transition identified herein, which can be used to discover the role change of herd behavior, from a ruinous one to a helpful one. This chapter is also of value to some fields, ranging from management and social science, to ecology and evolution, and to physics.