According to the definition of herd behavior given above, herding results from an obvious intent by investors to copy the behavior of other investors. This should be distinguished from “spurious herding” where groups facing similar decision problems and information sets take similar decisions. Such spurious herding is an efficient outcome whereas “intentional” herding, as explained in Section I, need not be efficient. But it needs pointing out that empirically distinguishing “spurious herding” from “intentional” herding is easier said than done and may even be impossible, since typically, a multitude of factors have the potential to affect an investment decision
