Facebook Finance: How Social Interaction Propagates Active Investing

@article{Simon2012FacebookFH,
  title={Facebook Finance: How Social Interaction Propagates Active Investing},
  author={David Simon and Rawley Z. Heimer},
  journal={ERN: Behavioral Finance (Econometrics) (Topic)},
  year={2012}
}
This paper shows how active investing strategies propagate through social connections in a network of retail traders, using a new database of social activity linked to individual-level trading records. A trader’s good short-term performance causes them to contact others. A trader’s activity increases when peers perform well and increase communication. We use the staggered entry of brokerages into partnerships with the social networking platform, which is a necessary precursor for traders to… 
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