The Influence of Rumor on Stock Prices

rumor

Rumor is a type of social talk that people spread and believe. It serves a variety of functions to make sense of an uncertain situation or to help people adapt to threats. It is also a significant source of information and can be used for propaganda (DiFonzo, Bordia & Rutgers, 2000).

In general, people’s perceptions about rumors are affected by the following factors: subjectivity, attitude and attribution. The effects of these three factors are significant on the behavioral intention of rumor recognition. However, subjective norms are less influential than the other two factors. Therefore, a rumor’s credibility and severity are the most important factors affecting the behavioral intention of rumor recognition.

The Influence of Rumor on Stock Prices

The stock market is an environment where rumors can be widely spread. Many investors, especially speculators, use rumors to make their investment decisions and to influence stock price movements. As a result, the influence of rumors on the stock market has been an important topic of research and has generated much controversy in recent years.

When considering a rumor’s impact on stock prices, investors must consider the context of the rumor and its implications for their financial investment decisions. They must also determine whether the rumor is relevant to their lives and to their interests.

Moreover, investors should take into account the fact that rumors can be spread and believed by anyone. In addition, rumors can cause a lot of panic in society. For example, a rumor about a nuclear leakage caused by the Fukushima nuclear disaster in Japan was very popular on the internet and led to panic buying of salt.

A rumor can be spread and believed through any social media platform that allows users to post comments. This makes rumor spreading easier and faster than ever before, as well as a major risk for people’s reputations.

Rumor is a type of communication that aims to attract attention, evoke emotion and incite involvement. It also affects attitudes and actions in positive and negative ways.

Although rumor is an essential part of society, it is often difficult to understand why people spread and believe rumors. Rumors function in a wide range of contexts and are based on three psychological motivations–fact-finding, relationship-enhancement and self-enhancement.

Some rumors are useful for making sense of ambiguous situations or to help people adapt to perceived or actual threats; others are bogies that cause people to lose confidence in their own abilities. Some rumors are wedge-driving, meaning that they have the potential to break up relationships and destroy trust.

In addition, rumors can be effective for communication between groups. During war, for example, rumors can provide a means for military personnel to share information and support each other. They can also be helpful for the media to gain access to unguarded sources and develop new stories.

In this study, we integrate the planned behavior (TPB) and deterrence (TD) theories to analyze the rumor recognition behavior of social media users in emergencies. In addition, we test the effect of a rumor’s credibility and its severity on the behavioral intention of rumor recognition by using a structural equation model method. The results of the study show that a rumor’s credibility and the severity of a law have a significant impact on the rumor’s influence on social media users’ rumor recognition behavior.