Understanding and Evaluating Peer Effect on Financial Decision Making Process

Abstract

Financial decision making process is very much affected by peer effects which mean that decisions taken by the investors are widely affected by the relation with their friends, relatives, neighbours and colleagues. In this study, independent variables such as business communication, social learning, social utility etc and dependent variable, profitability was taken for the study. Primary data is collected using questionnaire from selected respondents. T-test is applied to find out whether social learning, social utility and business communication affects profitability of a business. From this study it was found that there was strong peer influence for the successful organizations.