News Diffusion in Social Networks and Stock Market Reactions
Speaker: Professor David Hirschleifer
Affiliation: University of Southern California
Location: Room 629, Colin Clark Building (#39), UQ St Lucia Campus or,
via Zoom link: https://uqz.zoom.us/j/82603079317
Abstract
We study how the social transmission of public news influences investors' beliefs and securities markets. Using an extensive dataset to measure investor social networks, we find that earnings announcements from firms in higher-centrality locations generate stronger immediate price and trading volume reactions. Post announcement, such firms experience weaker price drifts but higher and more persistent volume. This evidence suggests that while greater social connectedness facilitates timely incorporation of news into prices, it also triggers opinion divergence and excessive trading. We provide a model of these effects and present further supporting evidence with granular data based on StockTwits messages and household trading records.
About the presenter's visit
If you would like to meet with Prof Hirschleifer please contact: Dr Zachary Breig.
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