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Informative social interactions

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  • Arrondel, Luc
  • Calvo-Pardo, Hector
  • Giannitsarou, Chryssi
  • Haliassos, Michael

Abstract

We design, field and exploit survey data from a representative sample of the French population to examine whether informative social interactions enter households'stockholding decisions. Respondents report perceptions about their circle of peers with whom they interact about 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, and financial behavior. We also find evidence of mindless imitation of peers in the outer social circle, but this does not permeate as many layers of financial behavior as informative social interactions do.

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  • Arrondel, Luc & Calvo-Pardo, Hector & Giannitsarou, Chryssi & Haliassos, Michael, 2019. "Informative social interactions," IMFS Working Paper Series 136, Goethe University Frankfurt, Institute for Monetary and Financial Stability (IMFS).
    • Handle: RePEc:zbw:imfswp:136
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    2. Theresa Kuchler & Johannes Stroebel, 2021. "Social Finance," Annual Review of Financial Economics, Annual Reviews, vol. 13(1), pages 37-55, November.
    3. Luc Arrondel, 2020. "Financial literacy and French behaviour on the stock market," Working Papers halshs-02505320, HAL.
    4. Pamela Giustinelli & Matthew D. Shapiro, 2024. "SeaTE: Subjective Ex Ante Treatment Effect of Health on Retirement," American Economic Journal: Applied Economics, American Economic Association, vol. 16(2), pages 278-317, April.
    5. Boehl, Gregor, 2022. "Efficient solution and computation of models with occasionally binding constraints," Journal of Economic Dynamics and Control, Elsevier, vol. 143(C).
    6. John Ameriks & Gábor Kézdi & Minjoon Lee & Matthew D. Shapiro, 2020. "Heterogeneity in Expectations, Risk Tolerance, and Household Stock Shares: The Attenuation Puzzle," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 38(3), pages 633-646, July.
    7. Duraj, Kamila & Grunow, Daniela & Chaliasos, Michael & Laudenbach, Christine & Siegel, Stephan, 2024. "Rethinking the stock market participation puzzle: A qualitative approach," IMFS Working Paper Series 210, Goethe University Frankfurt, Institute for Monetary and Financial Stability (IMFS).

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    More about this item

    Keywords

    Information networks; Social interactions; Subjective expectations; Peer effects; Portfolio choice;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • C42 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Survey Methods

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