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I Did it Your Way. An Experimental Investigation of Peer Effects in Investment Choices

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  • Alexia Delfino
  • Luigi Marengo
  • Matteo Ploner

    ()

Abstract

We experimentally investigate imitation in investment choices and focus on cognitive aspects of decision making. At this aim, we manipulate three main dimensions of choice: time pressure, normative content of social information, and uncertainty of the investment. We document the existence of imitation, with stronger social effects among those who discover to be less cautious than their peers. In line with our hypotheses, a piece of information which is more representative of average group behavior induces stronger imitation. Furthermore, higher time pressure fosters imitation. In contrast to our hypotheses, imitation is weaker for uncertain investments than for risky investments.

Suggested Citation

  • Alexia Delfino & Luigi Marengo & Matteo Ploner, 2013. "I Did it Your Way. An Experimental Investigation of Peer Effects in Investment Choices," CEEL Working Papers 1305, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
  • Handle: RePEc:trn:utwpce:1305
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Economics as science
      by chris dillow in Stumbling and Mumbling on 2013-10-25 17:59:27
    2. Socially influenced preferences
      by chris in Stumbling and Mumbling on 2016-11-02 17:53:20

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    Cited by:

    1. Wendelin Schnedler & Nina Lucia Stephan, 2018. "What breaks the chain of unkindness: emotional closure or signaling?," Working Papers Dissertations 29, Paderborn University, Faculty of Business Administration and Economics.
    2. Daniela Di Cagno & Werner Güth & Marcello Puca & Patrizia Sbriglia, 2017. "Group Influence in Sharing Experiments," Labsi Experimental Economics Laboratory University of Siena 050, University of Siena.

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    Keywords

    Peer effects; Investment Decisions; Bounded Rationality; Experiments;

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