Paper Type
ERF
Abstract
False information, including fake news, rumors, and fabricated hoaxes affects society, politics, and economics. However, there is a lack of comprehensive research on the impact of false information on the stock market using a theoretical framework. Our research aims to bridge this gap by examining the financial consequences of both false and true information, using prospect theory to understand investor behavior in response to perceived gains and losses. We categorize information into four groups based on its authenticity and sentiment (negative false information, negative true information, positive false information, and positive true information) and compare their effects on stock prices and trading volumes. This study contributes to a deeper understanding of the economic implications of misinformation and offers insights into investor reactions to different types of news.
Paper Number
1559
Recommended Citation
Jeong, Bora and Jeong, Hana, "Which Impacts the Financial Market More: Positive Lies or Negative Truths?" (2024). AMCIS 2024 Proceedings. 5.
https://aisel.aisnet.org/amcis2024/ict_global/ict_global/5
Which Impacts the Financial Market More: Positive Lies or Negative Truths?
False information, including fake news, rumors, and fabricated hoaxes affects society, politics, and economics. However, there is a lack of comprehensive research on the impact of false information on the stock market using a theoretical framework. Our research aims to bridge this gap by examining the financial consequences of both false and true information, using prospect theory to understand investor behavior in response to perceived gains and losses. We categorize information into four groups based on its authenticity and sentiment (negative false information, negative true information, positive false information, and positive true information) and compare their effects on stock prices and trading volumes. This study contributes to a deeper understanding of the economic implications of misinformation and offers insights into investor reactions to different types of news.
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