Information diffusion effects in individual investors' common stock purchases: Covet thy neighbors' investment choices

Review of Financial Studies

Volumn 20, Issue 4, 2007, Pages 1327-1357

  Ivković, Zoran ^a,c   Weisbenner, Scott ^b,d  

^a MICHIGAN STATE UNIVERSITY   (United States)

^b UNIVERSITY OF ILLINOIS AT URBANA CHAMPAIGN   (United States)

^c MICHIGAN STATE UNIVERSITY   (United States)

^d UNIVERSITY OF ILLINOIS AT URBANA CHAMPAIGN   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 34547817657     PISSN: 08939454     EISSN: 14657368     Source Type: Journal    
DOI: 10.1093/revfin/hhm009     Document Type: Article

References (25)

1. Banerjee, A., 1992, "A Simple Model of Herd Behavior," Quarterly Journal of Economics, 107, 797-817.
2. Barber, B., and T. Odean, 2000, "Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors," Journal of Finance, 55, 773-806.
3. Barber, B., and T. Odean, 2007, "AU That Glitters: The Effect of Attention and News on the Buying Behavior of Individual and Institutional Investors," Review of Financial Studies, forthcoming.
4. Barber, B., T. Odean, and N. Zhu, 2006, "Systematic Noise," Working paper, UC Davis and UC Berkeley.
5. Bernheim, B. D., 1994, "A Theory of Conformity," Journal of Political Economy, 102, 841-877.
6. Campbell, J. Y., and J. H. Cochrane, 1999, "By Force of Habit: A Consumption-Based Explanation of Aggregate Stock Market Behavior," Journal of Political Economy, 107, 205-251.
7. Coval, J. D., and T. J. Moskowitz, 1999, "Home Bias at Home: Local Equity Preference in Domestic Portfolios," Journal of Finance, 54, 1-39.
8. Coval, J. D., and T. J. Moskowitz, 2001, "The Geography of Investment: Informed Trading and Asset Prices," Journal of Political Economy, 109, 811-841.
9. Duflo, E., and E. Saez, 2002, "Participation and Investment Decisions in a Retirement Plan: The Influence of Colleagues' Choices," Journal of Public Economics, 85, 121-148.
10. Duflo, E., and E. Saez, 2003, "The Role of Information and Social Interactions in Retirement Plan Decisions: Evidence from a Randomized Experiment," The Quarterly Journal of Public Economics, 118, 815-842.
11. Ellison, G., and D. Fudenberg, 1993, "Rules of Thumb for Social Learning," Journal of Political Economy, 101, 93-126.
12. Ellison, G., and D. Fudenberg, 1995, "Word of Mouth Communication and Social Learning," Quarterly Journal of Economics, 110, 93-125.
13. Feng, F., and M. Seasholes, 2004, "Correlated Trading and Location," Journal of Finance, 59, 2117-2144.
14. Freedom House, 2004, "Freedom in the World Country Ratings," available at http://www.freedomhouse.org/ratings/allscore04.xls.
15. Grinblatt, M., and M. Keloharju, 2001, "How Distance, Language, and Culture Influence Stockholdings and Trades," Journal of Finance, 56, 1053-1073.
16. Hong, H., J. D. Kubik, and J. C. Stein, 2004, "Social Interaction and Stock-Market Participation," Journal of Finance, 59, 137-163.
17. Hong, H., J. D. Kubik, and J. C. Stein, 2005, Thy Neighbor's Portfolio: Word-of-Mouth Effects in the Holdings and Trades of Money Managers," Journal of Finance, 60, 2801-2824.
18. Ivković, Z., J. Poterba, and S. Weisbenner, 2005, "Tax-Motivated Trading by Individual Investors," American Economic Review, 95, 1605-1630.
19. Ivković, Z., and S. Weisbenner, 2005, "Local Does as Local is: Information Content of the Geography of Individual Investors' Common Stock Investments," Journal of Finance, 60, 267-306.
20. Massa, M., and A. Simonov, 2006, "Hedging, Familiarity and Portfolio Choice," Review of Financial Studies, 19, 633-685.
21. Odean, T., 1998, "Are Investors Reluctant to Realize their Losses?" Journal of Finance, 53, 1775-1798.
22. Putnam, R. D., 2000, Bowling Alone: The Collapse and Revival of American Community, Simon and Schuster, New York.
23. Shore, S. H., and J. White, 2003, "External Habit Formation and the Home Bias Puzzle," Working Paper, Harvard University.
24. U.S. Census Bureau, 1990, Gazetteer Place and Zip Code Database.
25. Zhu, N., 2002, "The Local Bias of Individual Investors," Working paper, Yale School of Management.