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Impact of information spread and investment behavior on the diffusion of internet investment products

Author

Listed:
  • Zhao, Narisa
  • Cheng, Xiaokang
  • Guo, Xianda

Abstract

Social networks play an important role in financial markets because the information diffusion in social networks influences the participation of investors. Prior studies have investigated the impact of investor social networks, but few have explored the impact of investment behavior based on information spread in social networks. In this paper, we propose a model for studying the influence that information dissemination and investment behavior in social networks have on the adoption of internet investment products. Information spread process, temporary investment, regular investment and divestment are considered. The results show that the positive influence of regular investment and the negative impact of divestment are not sensitive to the time scale. In addition, the positive impact of regular investment rate is obvious only when the temporary investment rate is not too small, and vice versa. Furthermore, the negative influence of divestment and the information rejection can hardly be offset by increasing the regular investment rate.

Suggested Citation

  • Zhao, Narisa & Cheng, Xiaokang & Guo, Xianda, 2018. "Impact of information spread and investment behavior on the diffusion of internet investment products," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 512(C), pages 427-436.
  • Handle: RePEc:eee:phsmap:v:512:y:2018:i:c:p:427-436
    DOI: 10.1016/j.physa.2018.08.075
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    References listed on IDEAS

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