Informative Social Interactions

55 Pages Posted: 16 Jun 2020

See all articles by Luc Arrondel

Luc Arrondel

Paris School of Economics (PSE)

Hector Calvo Pardo

affiliation not provided to SSRN

Chryssi Giannitsarou

University of Cambridge - Faculty of Economics; Centre for Economic Policy Research (CEPR)

Michael Haliassos

Goethe University Frankfurt - House of Finance; Goethe University Frankfurt - Faculty of Economics and Business Administration; CEPR; NETSPAR; Goethe University Frankfurt - Institute for Monetary and Financial Stability (IMFS)

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Date Written: June 2020

Abstract

We collect survey data from a representative population sample to examine whether informative social interactions significantly influence perceptions of past returns, expectations, participation and exposure to a widely known financial instrument in a developed economy with multiple information sources. Respondents report perceptions about peers with whom they discuss 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, stock market participation and portfolio share. We find only mixed evidence of mindless imitation of peers, permeating fewer layers of financial behavior.

Keywords: household portfolio choice, Information networks, peer effects, Social interactions, subjective expectations

JEL Classification: D12, D83, D84, G11, G5

Suggested Citation

Arrondel, Luc and Calvo Pardo, Hector and Giannitsarou, Chryssi and Haliassos, Michael, Informative Social Interactions (June 2020). CEPR Discussion Paper No. DP14840, Available at SSRN: https://ssrn.com/abstract=3628160

Luc Arrondel (Contact Author)

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Hector Calvo Pardo

affiliation not provided to SSRN

Chryssi Giannitsarou

University of Cambridge - Faculty of Economics ( email )

Austin Robinson Building
Sidgwick Avenue
Cambridge, CB3 9DD
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Michael Haliassos

Goethe University Frankfurt - House of Finance

Theodor-W.-Adorno-Platz 3
PF H32
Frankfurt am Main, 60323
Germany

Goethe University Frankfurt - Faculty of Economics and Business Administration ( email )

Theodor-W.-Adorno-Platz 3
PF H32
Frankfurt am Main, D-60323
Germany

CEPR

London
United Kingdom

NETSPAR ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Goethe University Frankfurt - Institute for Monetary and Financial Stability (IMFS) ( email )

Theodor-W.-Adorno-Platz 1
Frankfurt, 60323
Germany

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