| Authors |
Escobar, Pedraza |
| Journal |
Journal of Financial Economics |
| Year |
2023 |
| Type |
Published Paper |
| Abstract |
We study the influence from social interactions on equity trading. Using unique data on stock transactions, we exploit the quasi-random assignment of students to classrooms in a financial training program to identify how peer experience affects investor behavior. We find that individuals react more to peer gains than to peer losses. Students enrolled in courses where peers have positive outcomes: (i) are more likely to start trading, (ii) purchase similar stocks as their classmates, and (iii) are disproportionally attracted to stocks
with extreme returns. These stocks have low subsequent returns, and new investors reacting to peer gains underperform other investors. |
| Keywords |
Stock market participation, peer effects, active trading, lottery stocks, social finance |
| URL |
https://www.sciencedirect.com/science/article/pii/S0304405X23001277 |
| Tags |
Archival Empirical |
Asset Pricing, Trading Volume and Market Efficiency |
Experimental / Survey-Based Empirical
|