Research On Compounding Effect Of Herd Behavior Of Institutional Investors And Individual Investors

The development of the financial system and the structuring of the resulting micro market have made micro entities play an increasingly important role in the stock market.The investment behavior of institutional investors and individual investors has largely affected the stock pricing mechanism.It is of great theoretical value and practical significance to study the compound of herd behavior of institutional investors and individual investors and its impact on asset price fluctuations.This article is to clarify the compound mechanism of herd behavior of institutional investors and individual investors and the effect mechanism of compound effects on asset prices,establish a theoretical analysis framework,and prove this topic through empirical tests.Mathematical models that describe the characteristics of institutional and individual investor transactions,and asymmetric game models between institutional and individual investors are used to construct an overall framework for the composite mechanism of herd behavior between institutional and individual investors.It then explores the compound effects of herd behavior of institutional investors and individual investors from two aspects: the impact on individual stock prices and the impact on the broader market.Establish an empirical model to analyze the complex transmission chain of institutional investors and individual investors herd behavior and its impact on market fluctuations.Studies have shown that individual investors are induced by institutional investors when they make investment decisions and exhibit herd behavior that follows institutional investors 'investment behavior.The compound transmission chain of herd behavior between institutional investors and individual investors is shown as follows: firstly,institutional investors of institutional investors first obtain stock price information to open positions and hold shares,and afterward institutional investors judge that the stock is still based on rich investment experience There is also profit space to make buying decisions,forming herd behavior among institutional investors.The herd effect of institutional investors boosts stock prices and stimulates speculative enthusiasm for individual investors.Individual investors who have successively purchased form personal investments.The herd behavior among the investors,the compound herd behavior of institutional investors and individual investors led to a further rise in stock prices,which led to a more heated speculative atmosphere in the stock market.At this time,the foreseeing institutional investors judged the timing of lightening positions based on the rising stock prices and the enthusiastic stock market atmosphere.Withdrawal of funds in a timely manner,and then the institutional investors reacted immediately to form the herd behavior of institutional investors.The compound of herd behavior of institutional investors and individual investors led to market fluctuations,which in turn affected institutional investors and individuals.Herd behavior by investors.Studies on herd behavior at home and abroad have rarely studied the internal logic of the compound effects of institutional and individual investors on herd behavior,and are mostly limited to the existence of herd behavior and its impact on the secondary market.This article attempts to establish a theoretical analysis framework to systematically clarify the composite mechanism of institutional and individual investor herd behavior and its internal mechanism of impact on asset prices.