With this paper, I propose a simple asset pricing model that accounts for the influence from social interaction.\nInvestors are assumed to make up their mind about an asset�s price based on a forecasting strategy and its past\nprofitability as well as on the contemporaneous expectations of other market participants. Empirically analysing\nstocks in the DAX30 index, I provide evidence that social interaction rather destabilises financial markets. At least,\nit does not have a stabilising effect.
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