Presidential Address: Social Transmission Bias in Economics and Finance

71 Pages Posted: 28 Apr 2020 Last revised: 29 Apr 2021

See all articles by David A. Hirshleifer

David A. Hirshleifer

Marshall School of Business, USC; National Bureau of Economic Research (NBER)

Date Written: March 12, 2020


I discuss a new intellectual paradigm, 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, underexploited 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:

Transcript of the talk with integrated slides:

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

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., Presidential Address: Social Transmission Bias in Economics and Finance (March 12, 2020). Available at SSRN: or

David A. Hirshleifer (Contact Author)

Marshall School of Business, USC ( email )

Marshall School of Business
Los Angeles, CA 90089
United States

HOME PAGE: http://

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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