Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/205317
Authors: 
Gortner, Paul
van der Weele, Joël J.
Year of Publication: 
2019
Series/Report no.: 
Tinbergen Institute Discussion Paper No. TI 2019-027/I
Abstract: 
We investigate the effect of introducing information about peer portfolios in an experimental Arrow-Debreu economy. Confirming the prediction of a general equilibrium model with inequality averse preferences, we find that peer information leads to reduced variation in payoffs within peer groups. Information also improves risk sharing, as the data suggests that experiencing earnings deviations from peers induces a shift to more balanced portfolios. In a treatment where we highlight the highest earner, we observe a reduction in risk sharing, while highlighting the lowest earner has no effects compared to providing neutral information. Our results indicate that the presence of social information and its framing is an important determinant of equilibrium in financial markets.
Subjects: 
peer effects
laboratory experiments
risk taking
asset markets
JEL: 
C92
D53
G11
Document Type: 
Working Paper

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