Social interaction in securities investments

A behavioral-scientific consideration and empirical analysis of collaborative recommendation systems in case of securities investments

Web-based recommendation and advisory systems are considered to have a highly disruptive potential in the banking industry. Increasing digitalization and a general loss of confidence into traditional bank consultancy as a consequence of the financial crisis of 2008 are often said to be reasons for that. Social trading is the new buzzword for in particular collaborative recommendation systems more and more used by securities investors for communicating with other customers and for observing their investment decisions.

This paper aims at first identifying relevant usage determinants of online securities services in order to then assess the effect of collaborative recommendation systems on these determinants. The theoretically derived assessment model is empirically analyzed in an online experiment with 362 German securities investors. The test persons pretend to purchase securities on one out of seven simulated bank websites with differently designed recommendation systems. Afterwards, an online survey collects the required data.

The results of the first assessment stage show that 58% of the different intended usages of online securities services can be explained with the help of the four analyzed perception models. In addition to functional aspects, in particular hedonistic consumption motives are significant influencing factors of the decision how to use the services. The second assessment stage proves afterwards that collaborative recommendation systems have a positive impact both on the functional evaluation criteria of online securities services as well as on emotionally affective aspects, such as the perceived enjoyment. The paper provides new insights for research and practice which can also be applied beyond the research context of securities investments.

By Dr. Jens Wiegel.
2019. 300 pages, hardcover, EUR 69.-
ISBN 978-3-8314-0895-5

This publication is only available in German.

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