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 | Pop Finance: |
During the 1990s, the United States underwent a dramatic transformation: investing in stocks, once the province of a privileged elite, became a mass activity involving more than half of Americans. Pop Finance follows the trajectory of this new market populism via the rise of investment clubs, through which millions of people across the socioeconomic spectrum became investors for the first time. As sociologist Brooke Harrington shows, these new investors pour billions of dollars annually into the U.S. stock market and hold significant positions in some of the nation's largest firms. Drawing upon Harrington's long-term observation of investment clubs, along with in-depth interviews and extensive survey data, Pop Finance is the first book to examine the origins and impact of this mass engagement in investing. One of Harrington's most intriguing findings is that gender-based differences in investing can create a "diversity premium"--groups of men and women together are more profitable than single-sex groups. In examining the sources of this effect, she delves into the interpersonal dynamics that distinguish effective decision-making groups from their dysfunctional counterparts. In addition, Harrington shows that most Americans approach investing not only to make a profit but also to make a statement. In effect, portfolios have become like consumer products, serving both utilitarian and social ends. This ties into the growth of socially responsible investing and shareholder activism--matters relevant not only to social scientists but also to corporate leaders, policymakers, and the millions of Americans planning for retirement. Brooke Harrington is a researcher at the Max Planck Institute for the Study of Societies. "Superb, remarkably timely, and an extraordinary contribution to several fields. A wonderful study of how groups do and don't work, and a unique examination of how people really think about investments. Prepare to be surprised! Harrington's book is a classic. It will have a major academic impact; it will also get, and deserve to get, a large general readership."--Cass R. Sunstein, University of Chicago "A brilliant idea here: to study investment clubs up close, to observe the transmission of ideas and values at an investor's social nexus. The book provides deep insights into the mind of the market."--Robert J. Shiller, author of Irrational Exuberance and The New Financial Order "A fascinating study of group decision making in investment clubs. Harrington's insights on the role of gender make important contributions not only to behavioral finance but also to the value of diversity in organizations of all types."--Burton G. Malkiel, author of A Random Walk Down Wall Street "Although investment clubs in the United States hold hundreds of billions in assets, they have been marginalized by students of the market. Brooke Harrington brings this important corner of the informal economy out of the shadows. Her extensive data and firsthand experience illuminate puzzles such as why mixed-gender clubs perform better than single-sex, how such clubs may contribute to 'socially responsible investing,' and how a close look at these informal decisions helps clarify the nature and limits of market rationality. A major--and elegantly written--contribution to the sociology and economics of markets."--Mark Granovetter, Stanford University "This is an engaging book on an interesting and important topic. In examining investment clubs, Harrington contributes to our understanding of the growth of individual investors, which is significant in its own right, while contributing to the sociology of financial markets more generally."--David Stark, Columbia University Acknowledgments ix Link: Subject Areas:
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