Herding Behaviour Inside the Board: an Experimental Approach

An experimental study was conducted to measure the impact of herding behaviour inside a board of directors based on the González (2002 PhD dissertation) theoretical model, which maintains that in a board meeting composed of a CEO and two external directors (A and B), where voting is sequential (CEO ? A ? B) and the directors' reputations are valuable, director B tends to copy director A's decision. Based on the observations made through the experiment, we confirm the presence of herding behaviour. Copyright (c) 2006 The Authors; Journal compilation (c) 2006 Blackwell Publishing Ltd.

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