paper is a study of the consequences of the influx of these uninformed traders with a dynamic equilibrium framework. The results show that these strategic, uninformed online traders who adopt feedback strategies cannot outperform those who do not follow feedback strategies and that feedback trading cannot affect market equilibrium. The results also show that an informed trader’s equilibrium strategy and expected profit remain unchanged with or without feedback trading. The presence of feedback trading in the market does not affect the speed at which information gets incorporated into prices. If uninformed traders aggregately adopt a more aggressive feedback trading strategy, they bear a higher risk. It is therefore important to manage and contain these uninformed traders’ risks. The implications for regulating and designing such Internet trading systems are also discussed.
In this paper, we seek to determine whether a typical social media platform, Wikipedia, improves the information environment for investors in the financial market. Our theoretical lens leads us to expect that information aggregation about public companies on Wikipedia may influence how management's voluntary information disclosure reacts to market uncertainty with respect to investors' information about these companies. Our empirical analysis is based on a unique data set collected from financial records, management disclosure records, news article coverage, and a Wikipedia modification history of public companies. On the supply side of information, we find that information aggregation on Wikipedia can moderate the timing of managers' voluntary disclosure of companies' earnings disappointments, or bad news. On the demand side of information, we find that Wikipedia's information aggregation moderates investors' negative reaction to bad news. Taken together, these findings support the view that Wikipedia improves the information environment in the financial market and underscore the value of information aggregation through the use of information technology.
We study the effect of collaboration network structure on the contribution behavior of participating editors in Wikipedia. Collaboration in Wikipedia is organized around articles, and any two editors co-editing an article have a collaborative relationship. Based on the economic theories about network games and social role theory, we propose that an editor's position in the collaboration network influences the editor's decisions about her total contribution as well as the allocation of her efforts. By leveraging panel data collected from the Chinese language version of Wikipedia and a natural experiment resulting from blocking it in mainland China, we find strong support for the proposed effect of network position on contribution behavior. Our analysis further reveals that different aspects of an individual's network position have distinct implications. This research enhances our understanding about how collaboration network structure shapes individual behavior in online mass collaboration platforms.