ABSTRACT
Using unique data on employee stock purchase plans (ESPPs), we examine the influence of networks on investment decisions. Comparing employees within a firm during the same election window with metro area fixed effects, we find that the choices of coworkers in the firm's ESPP exert a significant influence on employeesâ own decisions to participate and trade. Moreover, we find that the presence of highâinformation employees magnifies the effects of peer networks. Given participation in an ESPP is valueâmaximizing, our analysis suggests the potential of networks and targeted investor education to improve financial decisionâmaking.