Peer Effects in the Trading Decisions of Individual Investors

Financial Management

Volumn 39, Issue 2, 2010, Pages 807-831

  Ng, Lilian ^a   Wu, Fei ^b,c  

^a UNIVERSITY OF WISCONSIN MILWAUKEE   (United States)

^b MASSEY UNIVERSITY   (New Zealand)

^c NONE

Author keywords

[No Author keywords available]

Indexed keywords

EID: 78649498988     PISSN: 00463892     EISSN: 1755053X     Source Type: Journal    
DOI: 10.1111/j.1755-053X.2010.01093.x     Document Type: Article

References (51)

1. Amihud, Y., M. Haim, and J. Uno, 1999, "Number of Shareholders and Stock Prices: Evidence from Japan, " Journal of Finance 54, 1169-1184.
2. Bailey, W., Y.P. Chung, and J. Kang, 1999, "Foreign Ownership Restrictions and Equity Price Premiums: What Drives the Demand for Cross-Border Investments Journal of Financial and Quantitative Analysis 34, 489-512.
3. Banerjee, A.V., 1992, "A Simple Model of Herd Behavior, " Quarterly Journal of Economics 107, 797-817.
4. Banerjee, A.V. and D. Fudenberg, 2004, "Word-of-Mouth Learning, " Games and Economic Behavior 46, 1-22.
5. Barber, B., T. Odean, and N. Zhu, 2009a, "Systematic Noise, " Journal of Financial Markets 12, 547-569.
6. Barber, B., T. Odean, and N. Zhu, 2009b, "Do Retail Trades Move Markets Review of Financial Studies 22, 151-186.
7. Bikhchandani, S., D. Hirshleifer, and I. Welch, 1992, "A Theory of Fads, Fashion, Custom, and Cultural Change as Information Cascade, " Journal of Political Economy 100, 992-1026.
8. Bris, A., W. Goetzmann, and N. Zhu, 2007, "Efficiency and the Bear, Short Sales and Markets around the World, " Journal of Finance 62, 1029-1079.
9. Brown, J.J. and P.H. Reingen, 1987, "Social Ties and Word-of-Mouth Referral Behavior, " Journal of Consumer Research 14, 350-362.
10. Brown, J.R., Z. Ivkovic, P.A. Smith, and S. Weisbenner, 2005, "Neighbors Matter: The Geography of Stock Market Participation, " University of Illinois Working Paper.
11. Cao, H.H. and D. Hirshleifer, 2002, "Taking the Road Less Traveled: Does Conversation Eradicate Pernicious Cascades?" Ohio State University Working Paper.
12. Chen, B., X. Li, and Y. Du, 2002, "A Survey of Individual Investors in Chinese Stock Markets, " ShenZhen Stock Exchange Research Report.
13. Chiao, C., 1982, "Guanxi: A Preliminary Conceptualization" in K.S. Yang and C.I. Wen, Eds., The Sinicization of Social and Behavioral Science Research in China, Taipei, Academia Sinica (in Chinese), 345-360.
14. Coval, J. and T. Moskowitz, 1999, "Home Bias at Home: Local Equity Preference in Domestic Portfolios, " Journal of Finance 54, 2045-2073.
15. Curran, P.J., E. Stice, and L. Chassin, 1997, "The Relation between Adolescent Alcohol Use and Peer Alcohol Use: A Longitudinal Random Coefficients Model, " Journal of Consulting and Clinical Psychology 65, 130-140.
16. Daniel, K., D. Hirshleifel, and A. Subrahmanyam, 1998, "Investor Psychology and Security Market Under- and Overreactions, " Journal of Finance 53, 1839-1886.
17. Dishion, T.J., J. McCord, and F. Poulin, 1999, "When Interventions Harm: Peer Groups and Problem Behavior, " American Psychologist 54, 755-764.
18. Ellison, G. and D. Fudenberg, 1993, "Rules of Thumb for Social Learning, " Journal of Political Economy 101, 93-126.
19. Ellison, G. and D. Fudenberg, 1995, "Word-of-Mouth Communication and Social Learning, " Quarterly Journal of Economics 110, 93-125.
20. Fama, E.F. and J.D. MacBeth, 1973, "Risk, Return, and Equilibrium: Empirical Tests, " Journal of Political Economy 71, 753-755.
21. Farth, J., A. Tsui, K. Xin, and B. Cheng, 1998, "The Influence of Relational Demography and Guanxi: The Chinese Case, " Organization Science 9, 471-488.
22. Feng, L. and M. Seasholes, 2004, "Correlated Trading and Location, " Journal of Finance 59, 2117-2144.
23. Foerster, S.R. and G.A. Karolyi, 1999, "The Effects of Market Segmentation and Investor Recognition on Asset Prices: Evidence from Foreign Stocks Listing in the United States, " Journal of Finance 54, 981-1013.
24. Glaeser, E.L., 2004, "Cities and Social Interactions, " Harvard University Working Paper.
25. Glaeser, E.L., B. Sacerdote, and J.A. Scheinkman, 1996, "Crimes and Social Interactions, " Quarterly Journal of Economics 111, 507-548.
26. Glaeser, E.L. and J.A. Scheinkman, 2000, "Non-Market Interactions, " NBER Working Paper No. 8053.
27. Hall, E.T., 1963, "A System for the Notation of Proxemic Behavior, " American Anthropologist 65, 1003-1026.
28. Hertz, E., 1998, The Trading Crowd: An Ethnography of the Shanghai Stock Market, Cambridge, UK, Cambridge University Press.
29. Hong, H., J. Kubik, and J. Stein, 2004, "Stock Interaction and Stock-Participation, " Journal of Finance 59, 137-163.
30. Hong, H., J. Kubik, and J. Stein, 2005, "Thy Neighbor's Portfolio: Word-of-Mouth Effects in the Holdings and Trades of Money Managers, " Journal of Finance 60, 2801-2824.
31. Huberman, G., 2001, "Familiarity Breeds Investment, " Review of Financial Studies 14, 659-680.
32. Ivkovic, 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.
33. Ivkovic, Z. and S. Weisbenner, 2006, "Information Diffusion Effects in Individuals' Common Stock Purchases: Covet thy Neighbors' Investment Choices, " Review of Financial Studies 20, 1327-1357.
34. Jackson, A., 2003, "The Aggregate Behavior of Individual Investors, " London Business School Working Paper.
35. Jencks, C. and S.M. Mayer, 1990, "The Social Consequences of Growing Up in a Poor Neighborhood" in L.E. Lynn Jr. and M.G.H. McGeary, Eds., Inner-City Poverty in the United States, Washington, DC, National Academy Press.
36. Jia, J., Q. Sun, and H.S. Tong, 2005, "Privatization through an Overseas Listing: Evidence from China's H-Shares Firms, " Financial Management 34, 5-26.
37. Kang, J. and R.M. Stulz, 1997, "Why Is There a Home Bias? An Analysis of Foreign Portfolio Equity Ownership in Japan, " Journal of Financial Economics 46, 3-28.
38. Katz, L.F., J.F. Kling, and J.B. Liebman, 2001, "Moving to Opportunity in Boston: Early Results of a Randomized Mobility Experiment, " Quarterly Journal of Economics 116, 607-654.
39. Lam, D. and X. Lin, 2003, "Guanxi and Word-of-Mouth, " Proceedings of the Australia and New Zealand Marketing Association Conference 2003, Adelaide, Australia.
40. Leung, T.K.P., Y.H. Wong, and J.L.M, Tam, 1995, "Adaptation and the Relationship Building Process in the People's Republic of China (PRC), " Journal of International Consumer Marketing 8, 7-19.
41. Mei, J., J.A. Scheinkman, and W. Xiong, 2005, "Speculative Trading and Stock Prices: An Analysis of Chinese A-B Share Premia, " New York University and Princeton University Working Paper.
42. Merton, R.C., 1987, "A Simple Model of Capital Market Equilibrium with Incomplete Information, " Journal of Finance 42, 483-510.
43. Money, R.B., M.C. Gilly, and J.L. Graham, 1998, "Explorations of National Culture and Word-of-Mouth Referral Behavior in the Purchase of Industrial Services in the United States and Japan, " Journal of Marketing 62, 76-87.
44. Morris, M.W. and K. Peng, 1994, "Culture and Cause: American and Chinese Attributions for Social and Physical Events, " Journal of Personality and Social Psychology 67, 949-971.
45. Newey, W.K. and K.D. West, 1987, "A Simple Positive Definite, Heteroskedasticity and Autocorrelation Consistent Covariance Matrix, " Econometrica 5, 703-705.
46. O'Keefe, H. and W.M. O'Keefe, 1997, "Chinese and Western Behavioral Differences: Understanding the Gaps, " International Journal of Social Economics 24, 190-196.
47. Osland, G.E., 1989, "Doing Business in China: A Framework for Cross-Cultural Understanding, " Marketing Intelligence & Planning 8, 4-14.
48. Shiller, R.J., 1995, "Conversation, Information and Herd Behavior, " American Economic Review 85, 181-185.
49. SHSE Fact Book, 2001, Available at:
50. Valliant, P.M., 1995, "Personality, Peer Influence and Use of Alcohol and Drugs by First-Year University Students, " Psychological Reports 77, 401-402.
51. Zhu, N., 2002, "The Local Bias of Individual Investors, " Yale ICF Working Paper No. 02-30.