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The OP Group Research Foundation’s annual doctoral dissertation prize was awarded to Dr Ville Rantala (pictured). The doctoral dissertation prize is 10 000 Euros.
In his dissertation “Essays on Peer Effects in Finance” which he defended at the Aalto University School of Business in May 2016, Dr Rantala examined how social interaction and social networks affect decision making in the field of finance. In his dissertation he analysed phenomena that are difficult to study empirically using new research methods and unique data from the Wincapita Ponzi scheme. Finance Professor Markku Kaustia supervised the dissertation.
The first part of the dissertation studies imitation and social learning and between companies. The first essay presents a new, self-organising classification method for publicly listed companies. The method is based on security analysts’ coverage choices.
The second essay uses this method to study imitation between companies in stock split decisions. The results show that companies are significantly more likely to execute a split if their peer firms have recently done so.
The third essay uses the Wincapita dataset to analyse the spreading process of word-of-mouth investment information and compares it with previous theoretical models. According to Dr Rantala, the social network structure observed in Wincapita explains how a new investment idea can spread very rapidly even if most investors do not spread it further or discuss it with only few other people.
The fourth essay analyses how the personal characteristics of the sponsors who invited people to join the scheme affected Wincapita investments. The results show that the members invested more relative to their income when their sponsor had a comparatively higher income level, was older or had a higher education.
Ville Rantala is currently Assistant Professor of Finance at the University of Miami.
Assistant Professor Ville Rantala
tel. +1 305-284-8286