Transcript of the AFA 2020 Presidential Address with Presentation Slides: Social Transmission Bias in Economics and Finance

39 Pages Posted: 28 Jan 2020

See all articles by David A. Hirshleifer

David A. Hirshleifer

University of California, Irvine - Paul Merage School of Business; NBER

Date Written: January 4, 2020

Abstract

I discuss an intellectual revolution, social economics and finance: the study of the social processes that shape economic thinking and behavior. This emerging field recognizes that people observe and talk to each other. A key, under-exploited building block of social economics and finance is social transmission bias: a systematic directional shift in signals or ideas in social transactions. I use five “fables” (models) to illustrate the novelty and scope of the transmission bias approach, and offer several emergent themes. For example, social transmission bias compounds recursively, which can help explain booms, bubbles, return anomalies, and swings in economic sentiment.

Presentation Slides available at: https://ssrn.com/abstract=3513210

Keywords: social transmission bias, social economics, social finance, behavioral economics, behavioral finance, social networks, social learning, information percolation, biased percolation, epidemiology, visibility bias, self-enhancing transmission bias, simplistic thinking, memes, cultural evolution

JEL Classification: A10, D03, D1, D21, D60, D84, D85, D91, G00, G02, G1, G11, G12, G14, G3, K00, M2, M21, M4, Z1, Z10, Z

Suggested Citation

Hirshleifer, David A., Transcript of the AFA 2020 Presidential Address with Presentation Slides: Social Transmission Bias in Economics and Finance (January 4, 2020). Available at SSRN: https://ssrn.com/abstract=3513201 or http://dx.doi.org/10.2139/ssrn.3513201

David A. Hirshleifer (Contact Author)

University of California, Irvine - Paul Merage School of Business ( email )

Paul Merage School of Business
Irvine, CA California 92697-3125
United States

HOME PAGE: http://sites.uci.edu/dhirshle/

NBER ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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