AFM241 Lecture Notes - Lecture 11: Capital Market, Emotional Contagion
Document Summary
Social media: internet based applications that encourage users to generate their own content for the application: dissemination channel for firm communication. Information selection and social media: applications can affect the types, subjectivity, and amount of information disclosed, based on audience, regulatory oversight and focus of social media. Information presentation and social media: applications facilitate and encourage specific choices for medium, e. g. text or audio, narrative attributes of disclosure are affected by the greater range of informality allowed. Informal language, wider range of language intensity: extent of tone that firms can convey, non-verbal attributes may be embedded in firm disclosure, nuanced messages, risk of inadvertent release of information. Social media increases communication channels to distribute information: design can encourage and enable more timely or prolonged processing of information by investors, may be affected by different audiences. Focus jointly investors and consumers, often mixing advertising and financial communication: may increase risk of misinterpretation.