THIRD-PERSON EFFECTS OF INTERNET STOCK RECOMMENDATIONS

Abstract

In this study we empirically tested the effects of the use of third-person perceptions in the context of the stock market using a sample of 109 professional stock traders and 130 members of the lay public. Findings show that people perceived anonymous information recommending stocks on the Internet as having a greater influence on others than on themselves. Additionally, participants demonstrated a third-person perception when "others" were novice investors with little knowledge or experience in stock trading than when "others" were presumed to be experienced investors. Professional stock traders perceived a greater influence on others than did the lay public. We also found support for the relationship between third-person perceptions and attitudes toward support for warnings about anonymous information.