Excuse-using when your actions turn against you: an empirical study on investors in the stock market
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2021-03-05
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en
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Abstract
In this thesis the excuse-using behaviour of investors in the stock market is studied. The main aim is to
provide empirical evidence for increased excuse-using by investors when their investment decisions
turn against them. This question is answered by using text data scraped from the microblogging platform
StockTwits. The sample consisted of 21 publicly trading stocks which were observed for 14 days. Using
OLS and Logistic estimation, a relation between stock prices and excuse-using frequency by investors
was observed. When the stock price of a firm decreased with more than 1% on a given day, the
probability of a given comment being an excuse increased by 0.421%. On the other hand, if a stock
price increases with more than 1% on a given day, reduced excuse-using of 0.47% was observed.
Furthermore, the magnitude of the negative returns strengthened the effect: more negative stock returns
led to more excuse-using by investors. Though careful methodological description and data analysis,
this thesis provides a framework and ideas for future research within behavioural economics.
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Faculteit der Managementwetenschappen