Abstract
The popularity of online social networking sites such as Facebook, LinkedIn, and Twitter has engendered discussion regarding their consequences for users, whether they be positive or negative. In this research, we draw on the cushion hypothesis from psychology and social capital theory from sociology to posit that using online social networking increases users’ financial risk-taking. Three studies show that online social circles such as “Facebook friends” are akin to collectivistic communities by offering users a “cushion” that mitigates financial loss, which increases users’ financial risk-taking, consistent with the cushion hypothesis. This greater financial risk-taking arises primarily when users perceive their online social circles as able or willing to provide financial support or of high quality, consistent with social capital theory. Thus, we link online social networking with financial risk-taking, with important welfare implications for today’s online users.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
