Behavioral biases in endogenous-timing herding games: An experimental study

We experimentally study behavior in an endogenous-timing herding game. We find that subjects respond to their type and to observed investment activity in a sensible way, but there are also substantial departures from Nash Equilibrium. Some departures can be viewed as mere noise in decision making while other departures represent systematic biases reflecting subjects’ failure to appreciate subtle aspects of the game.

► We experimentally study behavior in an endogenous-timing herding game.
► We find systematic biases.
► These biases reflect subjects’ failure to appreciate subtle aspects of the game.