Arbeitspapier
Good peers, good apples? Peer effects in portfolio quality
Peer effects can lead to better financial outcomes or help propagate financial mistakes across social networks. Using unique data on peer relationships and portfolio composition, we show considerable overlap in investment portfolios when an investor recommends their brokerage to a peer. We argue that this is strong evidence of peer effects and show that peer effects lead to better portfolio quality. Peers become more likely to invest in funds when their recommenders also invest, improving portfolio diversification compared to the average investor and various placebo counterfactuals. Our evidence suggests that social networks can provide good advice in settings where individuals are personally connected.
- Language
-
Englisch
- Bibliographic citation
-
Series: SAFE Working Paper ; No. 353
- Classification
-
Wirtschaft
Household Saving; Personal Finance
Portfolio Choice; Investment Decisions
- Subject
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Household finance
investment decisions
investment behavior
peer effects
social networks
- Event
-
Geistige Schöpfung
- (who)
-
Balakina, Olga
Bäckman, Claes
Hackethal, Andreas
Hanspal, Tobin
Lammer, Dominique Marcel
- Event
-
Veröffentlichung
- (who)
-
Leibniz Institute for Financial Research SAFE
- (where)
-
Frankfurt a. M.
- (when)
-
2022
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Balakina, Olga
- Bäckman, Claes
- Hackethal, Andreas
- Hanspal, Tobin
- Lammer, Dominique Marcel
- Leibniz Institute for Financial Research SAFE
Time of origin
- 2022
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