Pity the poor lemming. He is pilloried as the quintessential example of mindless group behavior.
As you can see from the video below, the critters rightly earn their reputation. They also exhibit a key economic concept, that it’s the behavior at the margin that’s most important. If the folks at Britannica are to be believed populations of lemmings go in cycles, building up until the population density reduces the available food and water. In response to the overcrowding, individual lemmings begin to migrate away from the centers of dense populations. This happens in increasing number such that the movement can be said to occur in “detectable waves.” As they encounter obstacles their numbers build until a “panic reaction” drives them to surmount the obstacle. Lemmings wouldn’t make such great investment metaphors if it wasn’t for what happens at the ocean, an obstacle they occasionally encounter. Having successfully crossed smaller bodies of water in their journey, they launch themselves into the water, en masse, only to drown from exhaustion.
Perhaps, though, there is more to the legend of lemming mass suicide. The video below is from Disney, and most of it reinforces the stereotype of lemmings. If you’re short on time just advance the playhead to 1:40 to see the lemmings launching themselves into the sea. This behavior would seem to doom the species to extinction, but it seems that a few lemmings stay put, choosing not to follow the crowd, and so it is with investments, where a few investors–to paraphrase Rudyard Kipling–keep their heads when all about them others are losing theirs.
Alas, it turns out that the Disney footage was sort of staged, as Snopes pointed out at this link.