Does herd behavior increase stock price volatility?

Research results have even given the opposite conclusions on whether herd behavior increase stock price volatility. Assume that the change of view for traders buying or selling is mainly affected by their cognitive ability for the basic value of stock and other traders' behaviors. This paper constructs a mathematical model describing the change of market average investment attitude and stock prices, and analyzes the stability of the model by using the related theory of discrete dynamic system, and defines the degree of herding behavior according to whether the financial market is stable. The results indicate that: in mild herding effect interval, stock prices accordingly present periodic micro-amplitude fluctuations; in moderate herding effect interval, after experiencing a period of damping volatility, stock prices convergence to equilibrium, and there exists an optimal degree of herding behavior which encourages the stock price to approach equilibrium in the fastest speed; in severe herding effect interval, stock prices irrationally sharply fluctuate in large amplitudes which can lead to severe stock market bubble and the financial crisis.