IDEAS home Printed from https://ideas.repec.org/a/inm/orisre/v35y2024i4p1546-1564.html
   My bibliography  Save this article

Social Trading, Communication, and Networks

Author

Listed:
  • Jiaying Deng

    (Gabelli School of Business, Fordham University, New York, New York 10023)

  • Mingwen Yang

    (Michael G. Foster School of Business, University of Washington, Seattle, Washington 98195)

  • Matthias Pelster

    (Mercator School of Management, University of Duisburg–Essen and European Center for Financial Services (ECFS), 47057 Duisburg, Germany)

  • Yong Tan

    (Michael G. Foster School of Business, University of Washington, Seattle, Washington 98195)

Abstract

Social trading is an emerging market in the sharing economy, allowing inexperienced investors (followers) to automatically follow the trades of experts (leaders) in real time. We use a separable temporal exponential random graph model to analyze the formation and dissolution of links in a large social trading network. In contrast to traditional social networks, social trading networks are characterized by the rapid dissolution of links, thereby increasing the importance of studying network dissolution. We investigate how social communication, along with financial performance and demographics, affects dynamic network evolution and address the existing dependence in the leader-follower links. The determinants of link formation and dissolution are asymmetric. Different types of social communication, such as posts and comments, have different implications for link formation and dissolution. Our results show that financial performance and demographic characteristics also become important determinants of link formation. However, once a link is formed, followers focus mainly on financial performance, in addition to social communication, and not on demographic characteristics. Thus, our findings have important implications for both investors and social trading platforms.

Suggested Citation

  • Jiaying Deng & Mingwen Yang & Matthias Pelster & Yong Tan, 2024. "Social Trading, Communication, and Networks," Information Systems Research, INFORMS, vol. 35(4), pages 1546-1564, December.
    • Handle: RePEc:inm:orisre:v:35:y:2024:i:4:p:1546-1564
    DOI: 10.1287/isre.2021.0143
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/isre.2021.0143
    Download Restriction: no
    File URL: https://libkey.io/10.1287/isre.2021.0143?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:orisre:v:35:y:2024:i:4:p:1546-1564. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.