Does social interaction destablise financial markets?
- With this paper, I propose a simple asset pricing model that accounts for the influence from social interaction. Investors are assumed to make up their mind about an asset’s price based on a forecasting strategy and its past profitability as well as on the contemporaneous expectations of other market participants. Empirically analysing stocks of the DAX30 index, I provide evidence that social interaction rather destabilises financial markets. Based on my results, I state that at least, it does not have a stabilising effect.
Author: | Frederik KönigGND |
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URN: | urn:nbn:de:hebis:30:3-300720 |
URL: | http://ssrn.com/abstract=2133960 |
DOI: | https://doi.org/10.2139/ssrn.2133960 |
Publisher: | Social Science Electronic Publ. |
Place of publication: | [S.l.] |
Document Type: | Report |
Language: | English |
Date of Publication (online): | 2012/08/22 |
Date of first Publication: | 2012/08/22 |
Publishing Institution: | Universitätsbibliothek Johann Christian Senckenberg |
Release Date: | 2013/06/06 |
Tag: | (De-)stabilisation; Asset Pricing; Social Interaction |
Issue: | SSRN-id2133960 |
Page Number: | 30 |
First Page: | 1 |
Last Page: | 30 |
HeBIS-PPN: | 347776701 |
Institutes: | Wirtschaftswissenschaften / Wirtschaftswissenschaften |
Dewey Decimal Classification: | 3 Sozialwissenschaften / 30 Sozialwissenschaften, Soziologie / 300 Sozialwissenschaften |
3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft | |
JEL-Classification: | A General Economics and Teaching / A1 General Economics / A14 Sociology of Economics |
Sammlungen: | Universitätspublikationen |
Licence (German): | Deutsches Urheberrecht |