Media Frenzies in Markets for Financial Information

S-Tier
Journal: American Economic Review
Year: 2006
Volume: 96
Issue: 3
Pages: 577-601

Score contribution per author:

8.043 = (α=2.01 / 1 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Emerging equity markets witness occasional surges in prices (frenzies) and crossmarket price dispersion (herds), accompanied by abundant media coverage. An information market complementarity can explain these anomalies. Because information has high fixed costs, high volume makes it inexpensive. Low prices induce investors to buy information that others buy. Given two identical assets, investors learn about one; abundant information reduces its payoff risk and raises its price. Transitions between low-information/low-asset-price and high-information/highasset- price equilibria resemble frenzies. Equity data and new panel data on news

Technical Details

RePEc Handle
repec:aea:aecrev:v:96:y:2006:i:3:p:577-601
Journal Field
General
Author Count
1
Added to Database
2026-01-29