Herding and anti-herding: A model of reputational differentiation

We analyze a model related to the strategic herding literature where a seco nd expert maximizes his expected second period value by conforming with a f irst expert ('herding'). In contrast to the herding literature we assume th at an agent is most valuable if he is the only smart agent. If the value of being the only smart agent is sufficiently large, the second expert always opposes its predecessor's report; otherwise, herding may result. (C) 2001 Elsevier Science B.V. All rights reserved. JEL classification: D8; L0.