STOCKBROKERS behave like sheep, say Victor Eguiluz and Martin Zimmermann of
the Mediterranean Institute for Advanced Study in Mallorca.
Market watchers have long known that stock market returns are not random, but
follow a 鈥減ower law鈥� distribution. The researchers showed that in a model in
which stockbrokers behave like flocking animals鈥攕haring information and
following the same rumours鈥攖he market returns vary in line with the power
law (Physical Review Letters, vol 85, p 5659).