Trading on Hearsay: Influencers’ Investment Horizon,
Transparency of Trading Institution, and Credible Information Sharing
Prof. Yohanes Eko RIYANTO
Professor of Economics
Nanyang Technological University, Singapore
Date: 25 October 2024 (Friday)
Time: 14:30 to 16:00
Venue: E22-G008
Host: Prof. Zhuo QIAO, Associate Professor in Business Economics
Abstract
We design an experiment featuring strategic information transmission from a privately informed investor capable of swaying followers’ investment decisions through a cheap-talk message. Confirming recent theoretical predictions, we find that a short investment horizon of influencers encourages credible information sharing among investors. Followers trade in the direction of the message from a short-term influencer but ignore a long-term influencer’s communication. Consequently, short-term influencers generate price impact through their messages, which increases with the transparency of the trading institution, while long-term influencers cannot affect the market price. The informational efficiency of asset prices is invariant to the influencer’s investment horizon.
Speaker
Prof. Yohanes Eko RIYANTO is a Professor of Economics at Nanyang Technological University, Singapore. Before joining NTU, he was a faculty member in the Department of Economics at the Faculty of Arts and Social Sciences, National University of Singapore, and a Post-Doctoral Fellow in Economics at the University of Groningen, Netherlands. He earned his Ph.D. in Economics from the Catholic University of Louvain (Katholieke Universiteit Leuven), in Louvain (Leuven), Belgium.
His research focuses on Experimental and Behavioral Economics topics. He utilizes controlled laboratory experiments to investigate how individuals make various economic decisions and how they are influenced by their preferences and beliefs, their environment (market and non-market institutions surrounding them), and their strategic interactions with other individuals. He incorporates insights from microeconomics, game theory, and behavioral sciences to formulate testable experimental hypotheses.
He has published his research in leading international refereed journals such as the Journal of Finance, Management Science, Journal of Economic Theory, Review of Economics and Statistics, Games and Economic Behavior, International Economic Review, European Economic Review, Experimental Economics, Journal of Economic Dynamics and Control, and Journal of Economic Behavior and Organization (JEBO). Currently, he is an Associate Editor of JEBO. His work has also been covered by the popular press such as The Economist, the Wall Street Journal, the Financial Times, and the New Statesman.
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