Do Investors Overreact to COVID-19 Outbreak? An Experimental Study Using Sequential Disclosures

IF 2.4 Q2 ECONOMICS

Contemporary Economics Pub Date : 2023-03-31 DOI:10.5709/ce.1897-9254.498

D. Sulistiawan, Y. Feliana, F. A. Rudiawarni, A. Grigorescu

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引用次数: 0

Abstract

This paper aims to investigate market participants' reactions to sequential information, presenting firm-specific news and market-wide information. Experimental study takes place in the COVID-19 pandemic era, as market-wide information representation. We also provide firm-specific information in the form of company fundamental information. The results show that participants, as representatives of retail investors, do not overreact to COVID-19. The recency effect dominates their decision-making. Neither firm-specific information nor market-wide information can eliminate the recency effect in decision making. Investors still provide valuations based on the latest information they receive. Another interesting finding in this study is that positive framing of information cannot mitigate the effects of bad news contained therein. Our findings contribute to the study of behavioral finance and corporate disclosure strategies. From the market participants' point of view, our results describe that investors' decisions are often not based on the information content but the latest information they received. From the company perspective, this research also contributes to the corporate disclosure strategy valued by investors based on how they disclose information to the public.

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投资者是否对COVID-19疫情反应过度?使用顺序披露的实验研究

本文旨在研究市场参与者对序列信息的反应，呈现公司特定的新闻和市场范围的信息。实验研究在COVID-19大流行时代进行，作为市场范围的信息表示。我们还以公司基本信息的形式提供公司特定信息。结果表明，作为散户投资者的代表，参与者对COVID-19没有过度反应。近因效应支配着他们的决策。企业特定信息和市场范围信息都不能消除决策中的近因效应。投资者仍然根据他们收到的最新信息提供估值。本研究另一个有趣的发现是，积极的信息框架不能减轻其中包含的坏消息的影响。我们的研究结果有助于行为金融学与公司信息披露策略的研究。从市场参与者的角度来看，我们的结果描述了投资者的决策往往不是基于信息内容，而是基于他们收到的最新信息。从公司的角度来看，本研究也有助于投资者所重视的公司披露策略，即公司如何向公众披露信息。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Contemporary Economics ECONOMICS-

CiteScore

3.70

自引率

9.50%

发文量

审稿时长

24 weeks

期刊介绍： The mission of the Contemporary Economics is to publish advanced theoretical and empirical research in economics, finance, accounting and management with the noticeable contribution and impact to the development of those disciplines and preferably with practice relevancies. All entirety of methods is desirable, including a falsification of conventional understanding, theory building through inductive or qualitative research, first empirical testing of a theory, meta-analysis with theoretical implications, constructive replication that clarifies the boundaries or range of a theory for theoretical research as well as qualitative, quantitative, field, laboratory, meta-analytic, and combination for an empirical research. This clear priority for comprehensive manuscripts containing a methodology-based theoretical and empirical research with implications and recommendations for policymaking does not exclude manuscripts entirely focused on theory or methodology. Manuscripts that raise significant, actual topics of international relevance will be highly appreciated. The interdisciplinary approach including – besides economic, financial, accounting or managerial –also other aspects, is welcomed.