Stock investments at work

Hans Hvide and Östberg, Per

No 9837, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Stock market investment decisions of individuals are positively correlated with that of co-workers. Sorting of unobservably similar individuals to the same workplaces is unlikely to explain our results, as evidenced by the investment behavior of individuals that move between plants. Purchases made under stronger co-worker purchase activity are not associated with higher returns. Moreover, social interaction appears to drive the purchase of within-industry stocks; an investment mistake. Overall, our results suggest a strong influence of co-workers on investment choices, but not an influence that improves the quality of investment decisions.

Keywords: Individual investors; Investment decisions; Peer effect; Social interaction; Stock selection (search for similar items in EconPapers)
JEL-codes: G02 G11 J00 (search for similar items in EconPapers)
Date: 2014-02
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Citations: View citations in EconPapers (2)

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