News or Noise: Mobile Internet Technology and Stock Market Activity
46 Pages Posted: 15 May 2020 Last revised: 22 Jun 2020
Date Written: May 21, 2020
Mobile internet devices reduce trading frictions and information search costs for investors, but also introduce attention-competing activities, such as social networking. We use exogenous nationwide and city-level outages of the Blackberry Internet Service (BIS) to investigate the effect of mobile internet technology on investors’ information-gathering vs. attention-diverting activities. We find that trading volume and trading frequency surge by about 5% on days when mobile internet systems go dark, consistent with a greater role for devices (when not dark) in diverting the limited attention of investors away from information-gathering and trading — even when they are used by presumably more sophisticated investors.
Keywords: mobile technology, investor activity, stock market liquidity, limited attention, distraction
JEL Classification: D83, G12, G14, L86
Suggested Citation: Suggested Citation