SIGNATURE WORK
CONFERENCE & EXHIBITION 2024

The following research investigates the interplay between behavioral economics, social relationships, and emotion in the domains of personal finance and stock market investing. Previous studies suggest investors tend to take fewer risks with funds that are earmarked for others, particularly those from their own family. This study expands previous research by exploring the role of social ties, the amount to be invested, and source of funds. I replicate studies of the influence of a social target on risk-taking and tests whether it is also influenced or moderated by how the funds were accumulated (own funds compared to a stimulus check). The results are consistent with previous research on social ties, as investors in the earmarked groups took fewer risks than those in the control group. Additionally, the groups not investing for family (child/parent) took more risk that those who were, indicating a biological component of financial decision-making involving risk. However, when people invested funds that partially came from a government stimulus check, those investing with their child’s money, occasionally took greater risks than those investing for themselves, which deviated my original expectations. These results call for future research, especially into the relationship between social ties and source of funds for investment.