Gregory D. Saxton and Ashley E. Anker of SUNY Buffalo have recently posted to SSRN their paper The Aggregate Effects of Decentralized Knowledge Production: Financial Bloggers and Information Asymmetries in the Stock Market. The paper was published in the Journal of Communication, vol. 63, no. 6, pp. 1054-1069.
Here is the abstract:
New media have markedly enhanced individuals’ capacity to produce and disseminate original knowledge; however, the literature has not extensively examined the broad effects of such decentralized production processes. The current study thus focuses on a unique context — the stock market — in which it is possible to test the aggregate impact of blog-based information production. Using data on 150 top financial bloggers and stock returns from the S&P 500, this study supports the hypothesis that financial blogging activity diminishes harmful information asymmetries between key market investors. This study thus adds to the “media effects” literature, highlights the societal relevance of bloggers, and shows how economic concepts and financial market settings can be employed for powerfully testing communication theories.