TY  - UNPD
A1  - Bosman, Ronald
A1  - Kräussl, Roman
A1  - Mirgorodskaya, Elizaveta
T1  - The "tone effect" of news on investor beliefs: an experimental approach
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 522
N2  - We investigate the effect of the tone of news on investor stock price expectations and beliefs. In an experimental study we ask subjects to estimate a future stock price for twelve real listed companies. As additional information we provide them with historical stock prices and extracts from real newspaper articles. We propose a way to manipulate the tone of news extracts without distorting its content. Subjects in different treatment groups read news items that are written either in positive or negative tone for each stock. We find that subjects tend to predict a significantly higher (lower) return for stocks after reading positive (negative) tone news. The effect is especially pronounced for stocks with poor past performance. Subjects are more likely to be optimistic (pessimistic) about the economy and to buy (sell) stocks after reading positive (negative) than negative (positive) tone news. Our results show that the news media might affect not only how investors perceive information, but also what they do in response to it.
T3  - CFS working paper series - 522 
KW  - Tone
KW  - News
KW  - Framing Effect
KW  - Price Expectations
KW  - Investor Sentiment
KW  - Investment Decisions
KW  - Experiment
Y1  - 2015
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/38663
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-386632
UR  - https://ifk-cfs.de/fileadmin/downloads/publications/wp/2015/CFS_WP_522.pdf
IS  - This Draft:March 2015
PB  - Center for Financial Studies
CY  - Frankfurt, M.
ER  -