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Informative Social Interactions

Informative Social Interactions
Informative Social Interactions
We design, field and exploit novel survey data, from a representative sample of the French population in December 2014 and May 2015 to provide insights regarding social interactions and whether they are informative for financial decisions, or they encourage imitation, mindful or mindless. We provide a model where purely informative social interactions influence subjective expectations of future stock market returns and demand for investing in stocks, and find strong support for the presence of informative social interactions. The extent to which the respondent's financial circle is informed about or participates in stockholding appears to influence perceptions of recent stock returns and, only through them, expectations of future returns. Controlling for subjective expectations, stock market participation and the conditional portfolio share are positively influenced by the extent to which the financial circle is informed about or participating in the stock market. Alongside informative social interactions with the respondent's financial circle, we also find some evidence of mindless
imitation of stock market participation observed in the outer social circle. These findings suggest that informative social interactions are significant and create a social multiplier for financial education and information, even though the potential for mindless imitation is also present.
0966-4246
1702
University of Southampton
Arrondel, Luc
51a6cd5b-0df0-453f-b29e-09fd5dee03fa
Calvo-Pardo, Hector
07a586f0-48ec-4049-932e-fb9fc575f59f
Giannitsarou, Chryssi
f2b54f93-23ca-4a61-a52a-3380cc223f5d
Haliassos, Michael
cc2bb5cb-d6ac-46cd-9e0f-91db10f17933
Arrondel, Luc
51a6cd5b-0df0-453f-b29e-09fd5dee03fa
Calvo-Pardo, Hector
07a586f0-48ec-4049-932e-fb9fc575f59f
Giannitsarou, Chryssi
f2b54f93-23ca-4a61-a52a-3380cc223f5d
Haliassos, Michael
cc2bb5cb-d6ac-46cd-9e0f-91db10f17933

Arrondel, Luc, Calvo-Pardo, Hector, Giannitsarou, Chryssi and Haliassos, Michael (2017) Informative Social Interactions University of Southampton 41pp. (Discussion Papers in Economics and Econometrics, 1702).

Record type: Monograph (Discussion Paper)

Abstract

We design, field and exploit novel survey data, from a representative sample of the French population in December 2014 and May 2015 to provide insights regarding social interactions and whether they are informative for financial decisions, or they encourage imitation, mindful or mindless. We provide a model where purely informative social interactions influence subjective expectations of future stock market returns and demand for investing in stocks, and find strong support for the presence of informative social interactions. The extent to which the respondent's financial circle is informed about or participates in stockholding appears to influence perceptions of recent stock returns and, only through them, expectations of future returns. Controlling for subjective expectations, stock market participation and the conditional portfolio share are positively influenced by the extent to which the financial circle is informed about or participating in the stock market. Alongside informative social interactions with the respondent's financial circle, we also find some evidence of mindless
imitation of stock market participation observed in the outer social circle. These findings suggest that informative social interactions are significant and create a social multiplier for financial education and information, even though the potential for mindless imitation is also present.

Full text not available from this repository.

More information

Published date: 27 May 2017
Organisations: Economics, Centre for Population Change

Identifiers

Local EPrints ID: 410910
URI: http://eprints.soton.ac.uk/id/eprint/410910
ISSN: 0966-4246
PURE UUID: bb1600f3-a4aa-42d8-9abf-adf2a7e0ef96
ORCID for Hector Calvo-Pardo: ORCID iD orcid.org/0000-0001-6645-4273

Catalogue record

Date deposited: 09 Jun 2017 16:31
Last modified: 17 Jul 2017 13:33

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Contributors

Author: Luc Arrondel
Author: Chryssi Giannitsarou
Author: Michael Haliassos

University divisions

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