Informative Social Interactions

39 Pages Posted: 16 Jun 2020 Last revised: 14 May 2021

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

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Date Written: June 2020

Abstract

Household finances are confidential and discussions are limited to a subset of peers. We collect novel representative survey data to examine separately whether interactions with inner and outer social circles influence return perceptions, expectations, and exposure to a widely known financial instrument in a developed economy with multiple information sources. We find that perceived prevalence of information or participation in the small financial circle improves expectation accuracy by boosting accuracy of perceived past returns; and influences stock participation and exposure not only through expectations, but also directly. We find little evidence of mindless imitation of the outer social circle in stockholding.

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

Suggested Citation

Arrondel, Luc and Calvo Pardo, Hector and Giannitsarou, Chryssi and Haliassos, Michael and Haliassos, Michael, Informative Social Interactions (June 2020). 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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