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 |
|---|---|
| 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 |
