Abstract
In this paper, we aim to study the impact of the shift in herding tendency on the diffusion of internet investment products in modular social networks. The epidemic spreading mechanism is applied and numerical analyses are conducted. The results suggest that the increase in herding tendency slows down the diffusion process and postpones the outbreak time of the diffusion, but such negative effects can be compromised when the independent acceptance willingness is high. When independent acceptance willingness is low, the limited extent of the herding tendency increases the diffusion scope. In addition, the expansion of the propagation lifetime or the increase of the clustering coefficient increases the threshold so that the herding tendency has an effect on outbreak size. Further, the growth of the herding propensity tends to magnify the positive influence of the clustering coefficient and the negative effect of the modularity.
Highlights
Herding behavior in financial markets has been extensively documented [1,2,3,4,5,6,7]
To have anevenly intuitive outline ofinthe diffusion pattern, we assume there are 3000 individuals only dispersed one entityin in one community carries the information of the internet investment product (IIP)
The results show that with the increase of the clustering coefficient, the range of τ shrinks, and the threshold of the herding tendency having an effect on the outbreak size effective range of τ shrinks, and the threshold of the herding tendency having an effect on the increases
Summary
Herding behavior in financial markets has been extensively documented [1,2,3,4,5,6,7]. Due to information asymmetry and distortion [8], an investor may make investment decisions independently or by following the observations of other investors [9]. A contiguous investment trend may emerge in the investor network and cause market volatilities. Digital innovation has propelled the rapid expansion of the internet investment market, and the investment trend of internet investment products has drawn increasing research interest. An internet investment product (IIP) is a personal investment product that is launched by financial institutions and is displayed and sold on online platforms [10]. By the end of 2017, China’s the value of transactions for internet financial products reached 15 trillion CNY, which was approximately 20%
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