Presidential Address: Social Transmission Bias in Economics and Finance
By David A. Hirshleifer. Journal of Finance, 2020
163 citations recorded by the source corpus.
I discuss a new intellectual paradigm, social economics and finance—the study of the social processes that shape economic thinking and behavior. This emerging field recognizes that people observe and talk to each other. A key, underexploited building block of social economics and finance is social transmission bias: systematic directional shift in signals or ideas induced by social transactions. I use five “fables” (models) to illustrate the novelty and scope of the transmission bias approach, and offer several emergent themes. For example, social transmission bias compounds recursively, which can help explain booms, bubbles, return anomalies, and swings in economic sentiment.
Subfields: Economics and Econometrics, Finance
View Paper: https://www.semanticscholar.org/paper/4d344ee5371abff3f66e52d3981c3e6a3f8f5e00
How researchers see this paper
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In Economics and Econometrics
- Lasse Heje Pedersen
- Arvind Krishnamurthy
- Darrell Duffie
- Nicolae Gârleanu
- Francis A. Longstaff
- Zhiguo He
- Tobias J. Moskowitz
- Angelo Ranaldo
In Finance
- Lasse Heje Pedersen
- Arvind Krishnamurthy
- Darrell Duffie
- Nicolae Gârleanu
- Hyun Song Shin
- Zhiguo He
- Tobias Adrian
- Francis A. Longstaff
Citations in the corpus
- Game On: Social Networks and Markets (2021, background): “Models of information percolation via random search (rather than a network) include Duffie et al. (2009), Andrei and Cujean (2017), and Hirshleifer (2020), where the latter paper assumes that the sender of information adds a bias in each random interaction termed a “social transmission bias.” most…”