The Effect of Intangible Information on Institutional Investors Herding Behavior by Comparing The Results of Christie and Huang Model and Lakonishok, Shleifer and Vishny Model

Intangible information, which is often obtained from the unofficial sources, causes information asymmetry in the capital market. This information will primarily create advantages for some investors; however, over time, with the release of intangible information and turning it from underhand information to revealed information, the value and power of this information advantage will be reduced.
On the other hand, in decision making model for herding behavior, unconditional compliance of other investors, because of assuming that they have an informational advantage, is the basis for decisions. These decisions lead to the influx of investors to trade the stock and fluctuation in prices that causes inefficiency, instability and fragility of the market.
In this study, the effect of intangible information on herding behavior of institutional investors has been studied in Tehran Stock Exchange during 2010 to 2014. In this regard, by comparing the results of Christie and Huang model and also Lakonishok, Shleifer and Vishny model, the effect of intangible information on herding behavior of institutional investors was analyzed.
The results indicate that, confirming the impact of intangible information on herding behavior of institutional investors, the impact is more intense on the Christie and Huang model compared to the Lakonishok, Shleifer and Vishny model.