Predicting Economic Market Crises Using Measures of Collective Panic

@article{Harmon2011PredictingEM,
  title={Predicting Economic Market Crises Using Measures of Collective Panic},
  author={Dion Harmon and M. D. Aguiar and D. Chinellato and D. Braha and I. Epstein and Y. Bar-Yam},
  journal={Behavioral & Experimental Finance eJournal},
  year={2011}
}
Predicting panic is of critical importance in many areas of human and animal behavior, notably in the context of economics. The recent financial crisis is a case in point. Panic may be due to a specific external threat, or self-generated nervousness. Here we show that the recent economic crisis and earlier large single-day panics were preceded by extended periods of high levels of market mimicry - direct evidence of uncertainty and nervousness, and of the comparatively weak influence of… Expand
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