Essays on Investment Behavior in Online Social Platforms

Abstract

Interpersonal interactions have been the cornerstone of research in a variety of disciplines, including psychology, sociology, economics, and management. Naturally, any fundamental shift in this regard can have far-reaching research and practical implications. In the last decade or so, one such shift has been the emergence of online platforms. By building on the advances in the internet technologies, online platforms have emerged as the new routes for interactions between different social entities, ranging from individuals to governments. For instance, Facebook and MySpace allow individuals to form online social networks, share personal information through various forms of content, and create groups and communities. LinkedIn and GlassDoor extend the same functionalities to professional networks through which individuals can seek employment, know more about a potential employer, and review their current and past employers. Twitter allows users to share news at a speed that, at times, outperforms the traditional news media. The considerable variation in the activities, which online platforms facilitate is matched by the array of research questions that different literature streams have examined. For social psychologists, the central research question is how different stimuli ingrained in most human interactions play out in online platforms. As McFarland and Ployhart (2015) argue, this research question has a potential to not only theoretically distinguish online social platforms from traditional, offline social contexts but also formulate an extensive program for future research. Regarding interpersonal exchanges in organizational settings, research questions of interest include how online platforms shape the exchanges between internal as well as external stakeholders such as knowledge sharing among employees (Wu, 2013), and customer engagement using online platforms (Kumar et al., 2016). Next, scholars have also attempted to extend established economic mechanisms, including matching markets (Horton, 2014; Hitsch, Hortaçsu, and Ariely, 2010) and network effects (Katona, Zubcsek, and Sarvary, 2011) to online platforms. Lastly, by their very nature, online platforms align with the study of social networks. Kane et al. (2014) have posited a series of research questions, adopting the social network analysis (SNA) lens for studying online platforms. Evidently, online platforms have opened newer research avenues across multiple fields. The present dissertation contributes to this body of work. The increasing economic activity happening in the digital space is our primary motivation. Perhaps no other instance underscores this trend more than the online investment and financial platforms (Lee & Shin 2018). The rising prominence of these platforms is also reflected in the recent calls for research explicitly targeted towards “Fintech” (Gomber, Kauffman, & Weber 2015; Hendershott et al., 2017). Such platforms are particularly interesting because they allow users to carry out a personal activity in a highly visible and transparent setting. For instance, Venmo broadcasts a user’s personal transactions, including bill and rent payments to her network. Kiva and Prosper publicize the amount of money that each investor has given to a Crowdfunding campaign (Lin & Viswanathan 2015). Social trading platforms allow users to broadcast their investment decisions in stocks and Forex (Glaser & Risius, 2017). Clearly, one observes that personal investment decisions and actions are increasingly taking place in a social domain. Given this transition, it is worthwhile to examine whether and how a focal user’s investments are susceptible to other users’ investment actions and decisions (Burtch, Ghose, & Wattal, 2013). The dissertation addresses this question through a series of related empirical studies.