Spring ’21 Inspiration Lecture 4
Does Interaction on Social Media Drive Extremeness or Moderation?
Professor Devin Shanthikumar
Paul Merage School of Business
University of California, Irvine
Wednesday, March 31, 6:30PM-8:00PM (New Delhi)
Using comment streams on Seeking Alpha articles, we examine whether interacting on social media increases or moderates the extremeness of investors’ opinions. Unlike findings from political science and platforms in which users select a subset of other users to “follow,” such as Twitter and Facebook, we find that interaction on Seeking Alpha moderates extremeness. Comments become less extreme over the sequence of comments for a given article, within individual comment sub-threads, and over a single user’s comments for a given article. Extremeness reduction is stronger when the article itself is more moderate, and when more users are self-identified (i.e., not anonymous). Results also suggest that the extremeness reduction triggered by Seeking Alpha articles has market implications. Differences of opinion captured by stock-based measures decrease significantly after Seeking Alpha articles with comments, but not after analyst forecast days or high-news days. Our results provide the first evidence of the influence of social media interaction on the updating of individuals’ opinions.
Professor Devin Shanthikumar is an Associate Professor at the University of California Irvine’s Paul Merage School of Business, and is the head of the Accounting Area. She teaches undergraduate, MBA, and executive-level courses in Managerial Accounting, and conducts research focusing on Financial Market participants. Prof. Shanthikumar’s research focuses on the investing decisions of individual investors and the impact that these investors have on the market, as well as on the role of financial intermediaries and information sources, such as analysts, the press, and the Internet. Her research has been published in top journals, including The Accounting Review, the Journal of Financial Economics, Review of Financial Studies, and Management Science. Prof. Shanthikumar was named to Poet and Quant’s Best 40 Under 40 Business Professors in 2019, and she has won numerous awards.
Prof. Shanthikumar earned her BS in Electrical Engineering and Computer Science from the University of California Berkeley. She earned her Ph.D. in Business Administration with a focus in Finance from Stanford’s Graduate School of Business. Prior to joining The University of California Irvine, Shanthikumar served as a Professor at Harvard Business School.
Moderated by: Sakshi Malik, Lecturer, JGBS