Abstract
Stock market investment decisions of individuals are positively correlated with those of coworkers. Sorting of unobservably similar individuals to the same workplaces is unlikely to explain this pattern, as evidenced by the investment behavior of individuals who move between plants. Purchases made under stronger coworker purchase activity are not associated with higher returns. Moreover, social interaction appears to drive the purchase of within-industry stocks. Overall, we find a strong influence of coworkers on investment choices, but not an influence that improves the quality of investment decisions.
| Original language | English |
|---|---|
| Pages (from-to) | 628-652 |
| Number of pages | 25 |
| Journal | Journal of Financial Economics |
| Volume | 117 |
| Issue number | 3 |
| Early online date | 12 Jun 2015 |
| DOIs | |
| Publication status | Published - Sept 2015 |
Keywords
- individual investors
- peer effects
- social interaction
- investment decisions
- stock selection
