The rate of communication

Huang, S., Hwang, B. & Lou, D.ORCID logo (2021). The rate of communication. Journal of Financial Economics, 141(2), 533 - 550. https://doi.org/10.1016/j.jfineco.2021.03.013
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We study the transmission of financial news and opinions through social interactions among retail investors in the United States. We identify a series of plausibly exogenous shocks, which cause “treated investors” to trade abnormally. We then trace the “contagion” of abnormal trading activity from the treated investors to their neighbors and their neighbors’ neighbors. Coupled with methodology drawn from epidemiology, our setting allows us to estimate the rate of communication and how it varies with the characteristics of the underlying investor population.
Item Type Article
Copyright holders © 2021 Elsevier B.V.
Departments LSE > Academic Departments > Finance
DOI 10.1016/j.jfineco.2021.03.013
Date Deposited 05 Aug 2020
Acceptance Date 16 Jul 2020
URI https://researchonline.lse.ac.uk/id/eprint/105870

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