Peer effects in financial decision-making

Ethan Lieber and William Skimmyhorn

Journal of Public Economics, 2018, vol. 163, issue C, 37-59

Abstract: Peer effects might play an important role in complex financial decisions because many consumers lack experience with them and the costs of thinking through such decisions can be very high. We study peer effects in retirement savings, life insurance purchase, and two charitable giving programs in a military setting with plausibly exogenous assignment of individuals to social groups. Peers, defined broadly as social groups which may include members of different ranks, appear to play an important role in the charitable giving programs, but not in the other outcomes. We assess a number of potential reasons for the disparate findings and provide suggestive evidence that the observability of individuals' choices is key.

Keywords: Social effects; Financial decision-making; Retirement savings; Charitable giving (search for similar items in EconPapers)
JEL-codes: C31 D14 D64 G02 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (25)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:163:y:2018:i:c:p:37-59

DOI: 10.1016/j.jpubeco.2018.05.001

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