Herd behavior and pensions

In these times of economic crises and financial volatility, the concept herd behavior has become very popular. Herd behavior describes how individuals in a group can act together without planned direction. In the pension systems the herd behavior has also been studied. Xaviera Vásquez from the Universidad de Chile finds that the regulation, that obliges all pension fund managers to have more or less equal returns, has provoked that all of them shows some herd behavior: basically, all pension fund managers choose the same investment portfolio, at least in the period studied by the author. Xaviera Vásquez was one of the winners of the Inter-American Award for Research on Social Security, awarded by the CISS.