Informative social interactions
Journal article: Household finances are confidential and discussions are limited to a subset of peers. We collect novel representative survey data to examine separately 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. We find that a respondent's connectedness, proxied by perceived prevalence of information or participation in the small financial circle, improves expectation accuracy indirectly, through boosting accuracy of perceived past returns; and influences stock participation and exposure not only by influencing expectations, but also directly.
Author(s)
Luc Arrondel, Hector Calvo-Pardo, Chryssi Giannitsarou, Michael Haliassos
Journal
- Journal of Economic Behavior and Organization
Date of publication
- 2022
Keywords
- Household finance
- Subjective expectations
- Peer effects Information networks
- Portfolio choice
Pages
- 246 – 263
URL of the HAL notice
Version
- 1
Volume
- 203