People want to be appreciate and feel self-worth. One approach they resort to is get other people to accept their own belief system.
As you can predict, however, they almost always fails.
People extract positive utility from behaviors consistent with their self-images, and negative utility if they do things that contradicts their belief.
So we see people with good self-image will generally outperform those without.
People who think a lot of how other people view them sometimes avoid making decision because that decision may incur guilt. Even they know the right decision to make, that procrastinate making it. That's the power of guilt.
Making decision right away beget expected guilt high enough that the cost at the present moment outweighs current benefit of making decision. But in the long run, the total benefit overwhelms the cost of guilt and procrastination. So the 'super ego' who maximizes the long run payoff would always make decision right away. The negative externality inherent in the principle-agent problem preclude making immediate decision.
It is the same case if the person may experience regret.
Being stubborn and insistent on one's correctness might boost one's confidence. Sometimes verbal descriptions (or feelings) of one's experiences overwrote one's memories of experiences themselves, and one ended up remembering not what they had experienced but what they had said (felt) about what they experienced.
There are a couple of reasons why herd behavior happens. The first is the social pressure of conformity. You probably know from experience that this can be a powerful force. This is because most people are very sociable and have a natural desire to be accepted by a group, rather than be branded as an outcast. Therefore, following the group is an ideal way of becoming a member.
The second reason is the common rationale that it's unlikely that such a large group could be wrong. After all, even if you are convinced that a particular idea or course or action is irrational or incorrect, you might still follow the herd, believing they know something that you don't. This is especially prevalent in situations in which an individual has very little experience.
http://www.investopedia.com/university/behavioral_finance/behavioral8.asp