# Herding driven by the desire to differ

## TL;DR

This paper explores how the desire to differ influences herding behavior in observational learning, revealing that preferences to act differently can paradoxically increase conformity among agents.

## Contribution

It introduces a novel analysis of herding driven by the desire to differ, showing how such preferences can paradoxically promote conformity in social learning.

## Key findings

- Preferences to differ can increase the likelihood of matching predecessors' actions.
- When agents conform despite the desire to differ, their actions become more informative.
- The desire to differ may reduce herding under certain conditions.

## Abstract

Observational learning often involves congestion: an agent gets lower payoff from an action when more predecessors have taken that action. This preference to act differently from previous agents may paradoxically increase all but one agent's probability of matching the actions of the predecessors. The reason is that when previous agents conform to their predecessors despite the preference to differ, their actions become more informative. The desire to match predecessors' actions may reduce herding by a similar reasoning.