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Social interaction at work

Author

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  • Hvide, Hans K.
  • Östberg, Per

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.

Suggested Citation

  • Hvide, Hans K. & Östberg, Per, 2015. "Social interaction at work," Journal of Financial Economics, Elsevier, vol. 117(3), pages 628-652.
    • Handle: RePEc:eee:jfinec:v:117:y:2015:i:3:p:628-652
    DOI: 10.1016/j.jfineco.2015.06.004
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    More about this item

    Keywords

    Individual investors; Peer effects; Social interaction; Investment decisions; Stock selection;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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