Citation

Discussion Paper Details

Please find the details for DP14840 in an easy to copy and paste format below:

Full Details

Title: Informative Social Interactions

Author(s): Luc Arrondel, Hector F. Calvo Pardo, Chryssi Giannitsarou and Michael Haliassos

Publication Date: June 2020

Keyword(s): household portfolio choice, Information networks, peer effects, Social interactions and subjective expectations

Programme Area(s): Financial Economics

Abstract: Household finances are confidential and discussions are limited to a subset of peers. We collect representative survey data to examine 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. Findings support the relevance of a small "financial circle". Perceived prevalence of information or participation in the financial circle improves expectation accuracy by improving accuracy of perceived past returns, and influences stock participation and exposure beyond expectations. Imitation of the outer circle, if present, is not based on return perceptions or expectations.

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Bibliographic Reference

Arrondel, L, Calvo Pardo, H, Giannitsarou, C and Haliassos, M. 2020. 'Informative Social Interactions'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=14840