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...

In this paper, I analyse the reciprocal social influence on investment decisions within an international group of roughly 2000 mutual fund managers that invested in companies of the DAX30. Using a robust estimation procedure, I provide empirical evidence that in the average a fund manager puts...

An analyst who works in Germany is more likely to publish a high (low) price target regarding a DAX30 stock if other Germany based analysts are also optimistic (pessimistic) about the same stock. This finding is not biased by the fact that DAX30 companies are headquartered in Germany. In times...

The existence of influence among participants on financial markets is affirmed by the theory of behavioural finance through the consideration of sociological aspects. The aim of this paper is to empirically contrast two kinds of social influence, namely herding and individual social interaction....

What is the mechanism that determines market prices of financial assets? The literature of modern finance theory brought out models in order to propose an answer to this question. These models presume that all market participants act strictly rationally. With this very restrictive assumption,...

In this paper, I analyze reciprocal social influence on investment decisions in an international group of roughly 2,000 mutual fund managers who invested in companies in the DAX30. Using a robust estimation procedure, I provide empirical evidence that the average fund manager puts 0.69 % more...