Where's the Money? The Social Behavior of Investors in Facebook's Small World

Are investing activities dependent on social relationships? In our research, we apply social network analysis to the field of investing behaviors and discover that investors have a tendency to invest in companies that are socially similar to them. While traditional studies on investing behavior tend to focus on factors like psychology, opinions, investing experience etc, they fail to consider social relationship as an important factor. In this paper we provide general rules of thumb that are useful for companies seeking funding from investor. These rules of thumb are generated by analyzing the social relationships between investors and companies found within the small world of Facebook.

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