Book Chapter2023
The Impact of Word-of-Mouth Communication on Investors’ Decisions and Asset Prices
Handbook of Financial Decision Making
In one sentence
A survey of the empirical literature on the presence and economic consequences of word-of-mouth communication among investors.
Summary
I review recent evidence on word of mouth among retail and institutional investors. On balance, information transmitted through word of mouth does not appear to help investors make better decisions. I discuss possible reasons and avenues for future research.