Sell-side analysts are professional experts while crowds are usually unsophisticated individual investors in the stock market. Understanding the different roles of experts and crowds in the stock market is a fundamental issue for both academia and industry. This empirical study tries to investigate their influences on the stock market by figuring out the following two questions: (1) Will experts and crowds have different impacts on stock prices? (2) Will experts and crowds discriminatively affect stock trading volumes? Adopting the fixed-effect model with panel data from Sogou and CSMAR, we find that experts and crowds have different impacts on the stock market. The wisdom of experts (i.e., analyst recommendation) has a more durable effect on stock prices but a smaller impact on stock turnover compared to the wisdom of crowds (i.e., abnormal search volume index).
Wu, Xianjiao; Ye, Qiang; Jin, Yu; and Li, Yijun, "Wisdom of Experts and Crowds: Different Impacts of Analyst Recommendation and Online Search on the Stock Market" (2019). PACIS 2019 Proceedings. 129.