Social interactions, framing, and the disposition effect

Increasing overlap between social media and financial markets has led to the emergence of new business models in recent years. Several online brokerage services combine the services of online brokerage with features of social networks and allow individuals to manage their portfolios and exchange capital market related information. Typical features enable investors to disclose and discuss their investment decisions with their peers. Recent literature provides convincing evidence that investors' investment strategies are altered by the social interactions and peer comparisons on those platforms (Heimer, 2016; Pelster and Hofmann, 2018; Lukas et al., 2017). However, the exact manner of investors' adaptions to the new setting is still unclear. For example, while some papers argue that social interactions increase the disposition effect, others argue that the disposition effect is decreased in such a scopic regime. We argue that the conflicting results can be explained by the framing of the decision problem on the platforms and test our hypothesis in an experimental setting