Herding as Constitutive Epistemic Strategy: When Crowds Create Value

This paper reconceptualises herding behaviour as sophisticated epistemic strategy by distinguishing two distinct mechanisms through which crowds generate knowledge. While informational value (IV) operates through standard testimonial channels – crowds reveal pre-existing facts through aggregated preferences – constitutive value (CV) represents a novel mechanism where collective participation creates the very facts agents seek to know. In CV cases, crowds act as epistemic agents generating beliefs that can provide value to individuals; they constitute worth through material transformations (restaurant freshness via turnover), social norm creation (fashion trends), or network effects (platform value). This dual-mechanism framework transforms normative assessments of conformity. Rather than treating independence as epistemic virtue, calibrated deference – recognising when crowds inform versus when they create – represents sophisticated epistemic agency suited to social environments. The analysis contributes formal threshold-deference criteria specifying when crowd-following is epistemically justified, and demonstrates how CV operates through self-validating mechanisms under suitable conditions. Through diverse applications from technology platforms to financial markets, the framework reveals that humans are sophisticated social learners who strategically leverage crowds as both information sources and value creators. This reconceptualisation has significant implications for understanding epistemic virtue in interconnected contexts where collective behaviour increasingly shapes the realities we navigate.