The social and objective value of information in virtual investment communities

– The purpose of this paper is to explore the social value of information in virtual investment communities and compare its effects with objective information value. A model including information quality, social comparison, and herding orientation, and their effects on decision usefulness and member satisfaction, is proposed and tested., – An online survey with a sample of 215 members of investment communities was conducted to test the proposed model., – The opinion comparison orientation of members and information credibility are positively related to their perceived decision usefulness and satisfaction. Consistency is positively related to decision usefulness, but not to member satisfaction. Members' herding tendency moderates the effect of opinion comparison orientation on decision usefulness and the effect of ability comparison orientation on satisfaction., – The sample is small and not random. The proportion of students in the sample seems to be higher than it should be among virtual investment community members., – Investors should be careful regarding the social influences of their communities; the effects may not always be good for investment decisions., – Virtual communities provide members with social comparison information, which may yield positive effects for members in inspiration, self‐improvement, and self‐enhancement., – The virtual community can be a forum where people gain information regarding others to satisfy their needs for social comparison. Virtual communities provide special social value for their members, even for those who do not interact with others by posting in the communities.

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