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The Impact of Economic Agents Perceptions on Stock Price Volatility

Author

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  • Jaroslav Bukovina

    (Department of Finance, Faculty of Business and Economics, Mendel University in Brno, Zemědělská 1, 613 00 Brno, Czech Republic)

Abstract

This paper studies perceptions of economic subjects and its impact on stock prices. Perceptions are represented by stock market indexes and Facebook activity. The contribution of this paper is twofold. In the first place, this paper analyzes the unique data of Facebook activity and proposes the methodology for employment of social networks as a proxy variable which represents the perceptions of information in society related to the specific company. The second contribution is the proposal of potential link between social network principles and theories of behavioral economics. Overall, the author finds the negative impact of Facebook activity on stock prices and the positive impact of stock market indices. The author points the implications of findings to protection of company reputation and to investment strategy based on the existence of undervalued stocks.

Suggested Citation

  • Jaroslav Bukovina, 2015. "The Impact of Economic Agents Perceptions on Stock Price Volatility," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 63(4), pages 1229-1234.
    • Handle: RePEc:mup:actaun:actaun_2015063041229
    DOI: 10.11118/actaun201563041229
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    References listed on IDEAS

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