Social Trading platforms combine the trading functionalities of classical online broker services with the communication and interaction features of social networks. Next to following other users’ profiles, a main characteristic of social trading platforms is the possibility to follow other users by automatically copying their trades. By being a technologically based financial intermediary that enables individual profit maximization, social trading platforms constitute a contemporary example of financialization. Our empirical analysis of the behavior of traders on a social trading platform provides new insights on financialization related questions regarding the influence of transparency and interaction in delegated investment environments. The disposition effect is a well-studied behavioral bias of investors and traders. Human investors tend to realize returns of their winning positions too early and let unfavorable positions accumulate losses for too long. We find that on social trading platforms the traders’ sensitivity to the disposition effect is influenced by the amount of attention they receive from their followers who invested capital into the traders’ strategy. These novel insights propose a link between principal-agent theory and the disposition effect induced by transparency mechanisms. We extend the literature on trader-investor interaction channels in social trading networks. The results obtained in a social network environment are of high relevance for regulators who have a strong focus on customer protection and financial services regulation. They also provide guidelines for platform designers, traders, investors and social trading platform operators.

中文翻译：

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透明度的影响：分析社交偏见对社交交易中交易者表现的影响

社交交易平台将经典在线经纪服务的交易功能与社交网络的通信和交互功能相结合。除了关注其他用户的个人资料之外，社交交易平台的一个主要特征是可以通过自动复制他们的交易来关注其他用户。作为基于技术的金融中介，能够实现个人利润最大化，社交交易平台构成了当代金融化的例子。我们对社交交易平台上交易者行为的实证分析为金融化相关问题提供了新见解，这些问题涉及委托投资环境中透明度和互动的影响。处置效应是投资者和交易者经过充分研究的行为偏差。人类投资者往往会过早地实现获利头寸的回报，并让不利头寸累积损失太久。我们发现，在社交交易平台上，交易者对处置效应的敏感性受到他们从将资金投入交易者策略的追随者那里获得的关注程度的影响。这些新颖的见解提出了委托代理理论与透明度机制引起的处置效应之间的联系。我们扩展了社交交易网络中交易者-投资者互动渠道的文献。在社交网络环境中获得的结果对于高度关注客户保护和金融服务监管的监管机构具有高度相关性。他们还为平台设计者、交易者、