Informative Social Interactions
52 Pages Posted: 14 May 2018 Last revised: 25 Nov 2019
Date Written: November 22, 2019
We design, field and exploit survey data from a representative sample of the French population to examine whether informative social interactions enter households stockholding decisions. Respondents report perceptions about their circle of peers with whom they interact about financial matters, their social circle and the population. We provide evidence for the presence of an information channel through which social interactions influence perceptions and expectations about stock returns, and financial behavior. We also find evidence of mindless imitation of peers in the outer social circle, but this does not permeate as many layers of financial behavior as informative social interactions do.
Keywords: Information Networks; Social Interactions; Subjective Expectations; Peer Effects; Portfolio Choice
JEL Classification: D12; D83; D84; G11; C42
Suggested Citation: Suggested Citation