We provide evidence that for some values of the parameters a simple agent
based model, describing herding behavior, yields signals with 1/f power
spectral density. We derive a non-linear stochastic differential equation for
the ratio of number of agents and show, that it has the form proposed earlier
for modeling of 1/f^beta noise with different exponents beta. The non-linear
terms in the transition probabilities, quantifying the herding behavior, are
crucial to the appearance of 1/f noise. Thus, the herding dynamics can be seen
as a microscopic explanation of the proposed non-linear stochastic differential
equations generating signals with 1/f^beta spectrum. We also consider the
possible feedback of macroscopic state on microscopic transition probabilities
strengthening the non-linearity of equations and providing more opportunities
in the modeling of processes exhibiting power-law statistics
