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# Social Audience Size as a Reference Point: Evidence from a Field Experiment

## Details

**Authors** Xingchen Xu, Qili Wang, Yizhi Liu, Liangfei Qiu

**Year** 2026

**Publisher** Management Science

**Kind of work** article

**Discipline** Business & Management

**Secondary disciplines** Economics

**Applied** false

[Read it at the publisher](https://doi.org/10.1287/mnsc.2022.03144) 
10.1287/mnsc.2022.03144

## In authors' words

### Abstract

In the dynamic landscape of the digital economy, social trading platforms are experiencing rapid growth. Our study delves into the impact of changes in social audience size—measured by the number of followers—on traders' performance and behaviors. Utilizing data from a company-led randomized field experiment conducted on a prominent cryptocurrency social trading platform, we unearth intriguing findings. Traders garnering increased social audience size exhibit tendencies to trade more frequently, utilize higher leverage, and, surprisingly, attain poorer performance. Notably, these adverse effects intensify among traders who previously excelled, suggesting a link to overconfidence. Interestingly, our research uncovers a reference point effect associated with social audience size. Removing accumulated social audience size does not alleviate the negative consequences, instead, they persist. Additionally, we observe an extra adverse effect when traders experience a reduction in the digit magnitude of follower counts, supporting our hypothesis about social audience size serving as a reference point. Our study carries significant implications for the design of social trading platforms. It serves as a crucial reminder for both traders and platform managers to carefully navigate the interplay between social audience size dynamics and trading decisions.

### What they set out to do (purpose)

To test whether a trader's number of social-media followers on a trading platform acts as a psychological reference point that shapes trading behavior and performance, using a live platform field experiment.

### Who or what was studied (sample)

Traders on a major cryptocurrency social trading platform, studied through a company-led randomized field experiment that varied traders' follower counts.

### How they did it (methods)

Randomized field experiment on a live social trading platform comparing trading frequency, leverage use, and performance across traders whose follower counts were experimentally changed, including tests for whether removing accumulated followers reversed effects and whether crossing a round-number digit threshold (e.g., 10,000 to 9,999 followers) produced an additional effect.

### What they found (results)

Traders who gained more social-media followers on a trading platform traded more frequently, used higher leverage, and performed worse, with these effects persisting after followers were removed and intensifying when follower counts dropped across a round-number digit threshold, consistent with follower count functioning as a reference point.

## Commentary

### In short

The finding shows that traders evaluate the same objective quantity (follower count) differently depending on the reference point from which they view it, and that a categorical boundary crossing (a round-number digit threshold) intensifies that effect, illustrating perspective-dependent valuation paired with a distinction-based threshold.

**Patterns it shows** D, P

**Added** 2026-09-26

**How to cite this** Xingchen Xu, Qili Wang, Yizhi Liu, Liangfei Qiu (2026). Social Audience Size as a Reference Point: Evidence from a Field Experiment. Management Science.