Abstract
This study examines the importance and effects of community-based signals when choosing a trader to copy in a mock-up social trading platform. Although the studies examining the effects of social influence in choosing a trader to copy and herding point toward the importance of social influence, these works do not evaluate how related signals in different constellations with other signals affect the copying behavior. The results of a two-alternative forced-choice experiment in which subjects made 18 investment decisions systematically show the importance of community-based signals in the selection of traders judged worth copying, i.e., their potential to influence investment decisions and the general preference toward positive social profiles.
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