Social interactions and asset pricing bubbles
Sören Steiger and
Journal of Economic Behavior & Organization, 2020, vol. 179, issue C, 503-522
We investigate the influence of social interactions on asset markets and provide an empirical test of the hypothesis that social interactions increase asset pricing bubbles. We test the impact of social interactions on bubbles in a bubble-prone experimental asset-pricing market. Over a total of 21 markets, we compare asset pricing bubbles in a design that allows for social interactions with a standard laboratory setting. Markets that allow for face-to-face communication between participants in a lab-in-the-field setting show significantly larger asset pricing bubbles relative to standard laboratory markets. Face-to-face communication increases bubbles to a larger extend than a popular social media feature, the like.
Keywords: Social interactions; Investor behavior; Bubbles; Communication; Cheap talk; Emotions (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:179:y:2020:i:c:p:503-522
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