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Are you a Sheep?

A woman in Kew Gardens, Queens was stalked and stabbed multiple times. She screamed for help for over half an hour, 38 people were present and heard her scream. No one helped her. How?

The case became famous as no one could figure out how 38 separate civilians failed to act. Were they all criminals? Were they in on it? Was it a mob reckoning? Was it a dangerous neighbourhood and these things happened more often? None of the above. There was no angry mob nor evil intent. There was no intent at all. There were just 38 people. And there lies your issue.

In an ambiguous situation, what do you do? You look around. We are social animals, we derive our cues from our environment. So, we all look around and see a bunch of other people looking around. This is the cue; everyone is just looking. Besides this, there is no action being undertaken. Almost simultaneously we now conclude that no action needs to be taken. Because no one is taking action. Observation made, decision taken. Now let’s move on with life.

This is the bystander effect. The more people present, the less likely one individual will engage in an action, because no one else is. It really doesn’t have anything to do with selfishness. It has to do with ambiguity, not knowing if help is needed or not knowing what to do if help is needed. There is also a sense of diffused responsibility: There are so many people present, why should you help out? Someone else could do it, right? If no one helps out, it all goes downhill and someone asks: “You were there, why didn’t you do something?”. The common answer is: “No one did anything.” and apparently that is an acceptable answer.

Another very similar phenomena is called herding, it really does make us sound like sheep. We like to stick with the herd. If the leader of the herd decides to go left, most of the herd will turn left too. This is especially visible in finance. Initially, there are the people who actually understand stock-investments. They invest in certain stocks that others may not have heard of. As the information leaks out that they, the mavericks of stock, have invested in this one stock, the herd starts moving. They follow. All of a sudden everyone is buying the stock. As a result, the price of the stock goes up and for some people this can be incredibly profitable.

The reverse works as well. The herd leaders decide to sell their stocks. Do they know something most people don’t? The herd panics. The herd follows. The herd doesn’t really think. The stock price plummets and the prediction made by the leaders came true. But was this due to stock overvaluation, company failure, market failure? Or was this just due to the mass sale of the stock? We might never know. Good job herd.

Contrarily to the bystander-effect, where nothing happens, herding enables mass movement. The issue with herding is: it isn’t beneficial to all. The herd leader can benefit from first-mover advantage and direct the herd to something that is profitable. There is a timing-effect to herding. The quicker you are, the more you tend to profit. The main part of the herd will only slightly profit, if at all. And the last-movers might receive negative utility from it.

Herding is a very powerful tool to use. You could enable mass movement into any direction you like if you have enough of a following. Things become a bit more dangerous if it turns out that the leading sheep is a wolf in sheep’s clothes. We have seen this many times before. Politicians and influential businessmen leading their followers with beautiful words and promises past mountains of gold into the pits of pure hell.

So, what do we do with all this information? If you are ever in a situation where you need help, don’t just scream at a crowd. People love disappearing into the crowd without responsibility. Hold them accountable. Point at people, address them with “you there!” or get even more specific by describing them, what they are wearing etc. Losing face in public is worse than losing time helping out a stranger. Most people will succumb to the social pressure and will react accordingly. Once you have their attention, immediately direct them. Tell them what you need, so they can’t claim ignorance and their help becomes effective. Worst case scenario, they can find you a doctor or whatever it is you’d need in an emergency situation.

The battle is half-fought when one person decides to help out. It is very likely that the person who takes initiative is a herd-leader, it is just in their nature to act first. As a result, other social animals are likely to flock towards you as well. They have gotten their cues from the environment: one of their own, a previous bystander, has judged the situation as one to be intervened in. They will at least check out the situation. Is more help needed? Can they help as well? Sometimes they join out of sheer, and slightly morbid, curiosity. Or just to join the herd. But honestly, all attention is good attention when in an emergency.

What should you take away from this article? Don’t just look at the crowd and behave accordingly. You have a brain. Use it. Doing what everyone else is doing will not always be beneficial, there is a certain element of timing necessary to make joining the herd profitable. Also, look at who is moving the herd. Is it a smart sheep, or a dressed-up wolf? Don’t follow the wolf, it won’t end well.

And lastly, if someone is screaming their head off, help. Even if no one else is. They are not screaming for the fun of it. It might take 5 minutes of your life, but it could save theirs.

Don’t be a sheep.


Behavioural Science

Personal Finance



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