Abstract: The herd behavior acted by investors is a typical phenomenon in capital market. It refers to the behavior that a decision-maker follows others’ investment decision at the same time under the uncertain situation. By comparing, it has been found that the herd behavior is different from the conformity in essence. A great number of researches have been done to explore the reasons of herd behavior from three aspects which are social influence, cognitive mechanism of investors and evolution mechanism. In addition, some factors like uncertainty, investment environment, degree of group consistence, and individual emotion and motivation may influence the herd behavior as well. According to the prior research, herd behavior has its own unique information processing model. Moreover, future research on herd behavior should focus on the following five aspects, which are tracing the information processing model of professionals, improving the external validity of research, exploring the neural cognitive mechanism, carrying out cross-cultural research and seeking the relationship between the herd behavior and personality.

Key words: capital market, herd behavior, psychological mechanism