Social Media, News Media and the Stock Market

Peiran Jiao, Andre Veiga, Ansgar Walther

Research output: Working paper / PreprintWorking paper


We study the effect on stock volatility and turnover of coverage by traditional news media and social media. We find that coverage by traditional news media predicts decreases in subsequent volatility and turnover, but coverage by social media predicts increases in volatility and turnover. These patterns are inconsistent with rational models where social and news media both convey information. We show that they are consistent with a model of “echo chambers”, where social networks repeat news, but some investors interpret repeated signals as genuinely new information.
Original languageEnglish
Number of pages50
Publication statusPublished - 2018

Publication series

SeriesSSRN Working papers

JEL classifications

  • g02 - Behavioral Finance: Underlying Principles
  • g12 - "Asset Pricing; Trading volume; Bond Interest Rates"
  • g14 - "Information and Market Efficiency; Event Studies"


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