Abstract
Experimental studies in the area of Psychology and Behavioral Economics have suggested that people change their search pattern in response to positive and negative events. Using Internet search data provided by Google, we investigated the relationship between stock-specific events and related Google searches. We studied daily data from 13 stocks from the Dow-Jones and NASDAQ100 indices, over a period of 4 trading years. Focusing on periods in which stocks were extensively searched (Intensive Search Periods), we found a correlation between the magnitude of stock returns at the beginning of the period and the volume, peak, and duration of search generated during the period. This relation between magnitudes of stock returns and subsequent searches was considerably magnified in periods following negative stock returns. Yet, we did not find that intensive search periods following losses were associated with more Google searches than periods following gains. Thus, rather than increasing search, losses improved the fit between people’s search behavior and the extent of real-world events triggering the search. The findings demonstrate the robustness of the attentional effect of losses.
Highlights
Internet search engines have become an important tool for information gathering
Focusing on time periods when specific stocks were extensively searched (Intensive Search Periods; or ISPs), we evaluated the relation between stock price changes at the beginning of the PLOS ONE | DOI:10.1371/journal.pone
We identified all ISPs from the examined stocks, and tagged each ISP as “positive” or “negative”, according to the sign of the daily stock-return at the beginning of the period, i.e., the stock price change compared to the previous day
Summary
Analyzing data collected by major search engines such as Google may shed light on relations between real-world events and people’s information search behavior. Some studies have suggested that specific search queries may even anticipate subsequent stock market price changes [6,7,8]. Rather than testing the effect of search on stock-price dynamics, we investigated how search for stock-related information is affected by market events, as reflected by stock price changes [9]. Focusing on time periods when specific stocks were extensively searched (Intensive Search Periods; or ISPs), we evaluated the relation between stock price changes at the beginning of the PLOS ONE | DOI:10.1371/journal.pone.0141354. Focusing on time periods when specific stocks were extensively searched (Intensive Search Periods; or ISPs), we evaluated the relation between stock price changes at the beginning of the PLOS ONE | DOI:10.1371/journal.pone.0141354 October 29, 2015
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
