Working Papers
Social Media and Stock Market Participation
with Karsten Müller, Carlo Schwarz · Revise and Resubmit, Journal of Financial and Quantitative Analysis
Abstract
Using plausibly exogenous variation in regional Twitter adoption in the United States, we show that a 10% increase in social media usage causes a 2.5% rise in stock ownership. Consistent with lowering the costs of acquiring information, Twitter has larger effects in counties with low pre-existing stock market knowledge, improves knowledge about asset returns, and leads to a decline in the number of financial advisors. Social media also boosts interest in volatile “meme stocks” favored by retail investors. Our findings highlight the unique influence of social media on household portfolio decisions, distinct from other modern information technologies.
Presentations
2024 American Finance Association (AFA)*, 2024 CEPR Eighth European Workshop on Household Finance*, 2023 Boulder Summer Conference on Consumer Financial Decision Making, 2023 Swiss Winter Conference on Financial Intermediation*, Society of Economics of the Household (SEHO) Meetings*, National University of Singapore Seminar, University of Colorado Boulder Seminar*, Università Bocconi Seminar*
Trading in Your Golden Years: The Effects of Early Pension Withdrawal on Individual Investments
with Sumit Agarwal, Allaudeen Hameed, Chek Ann Tan · Accepted, Review of Finance
Abstract
We examine the causal effects of a policy allowing early withdrawal of pension funds upon reaching age 55 on individuals’ investment behavior. Using transaction-level data from private brokerage accounts, we identify significant shifts in investment patterns following early withdrawals, including a 9% to 18% increase in trading volume. Individuals tend to trade more leveraged instruments and increase their portfolio volatility, thereby exposing their savings to greater financial risks. These effects are more pronounced among males and low-income individuals. Additionally, our analyses reveal that these trading behaviors lead to substantial losses, ultimately diminishing retirement wealth.
Presentations
Australian National University Seminar*, Humboldt University Seminar*, 2024 Asian Finance Association Conference*, Bond University Seminar*, 2024 China International Conference in Finance (CICF), 2024 European Finance Association (EFA), 2023 ZEW Public Finance Conference*, National University of Singapore Seminar*
Work in Progress
Competing Signals: How Retail Investors Allocate Attention Between Macro and Micro News
Yuanyuan Pan · Job Market Paper
Abstract
Using granular brokerage data from Singapore, I study how retail investors process firm-specific and macroeconomic information. On days with major foreign macro news, retail trading in firms with earnings announcements is 35% lower relative to other days. This effect reflects a reallocation of attention towards surprising information. The lower trading volume on macro days disappears when macro news contains no surprise, increases with the magnitude of the macro news surprise, and decreases when macro news and earnings announcements are aligned. In response to macro news, investors increase their trading in funds exposed to the country of the news release. Among investors who trade on days where macro news and earnings announcements overlap, disagreement falls, absolute order imbalance rises, but the sensitivity of trading speed to earnings surprise magnitude is reduced. Retail investors’ trades on macro-release overlap days outperform their own trades on non-overlap days by up to 2 percentage points per year, which comes entirely from market timing rather than stock picking. Taken together, my results show evidence that retail investors rationally reallocate their focus when faced with conflicting news.
Nominal Price Preferences, Investor Welfare and Market Quality
with Allaudeen Hameed, Zhenghui Ni
Abstract
We show that a behavioral preference for low-priced stocks is individually costly but collectively beneficial: retail investors lose money by overweighting low-priced stocks, yet their presence sustains liquidity, price efficiency, and valuations for all market participants. We establish this using the Singapore Exchange’s Minimum Trading Price rule, which generated staggered, regulation-induced reverse splits, combined with proprietary account-level trades that trace causal effects on investor behavior and market outcomes. When a held stock is pushed out of the low-price tier, retail investors cut trading by 70–77% and substitute into other low-priced stocks, preserving the price label rather than the underlying return distribution. Within-investor buy-minus-sell portfolios show that low-price trades underperform the same investor’s high-price trades by 2.8% per annum, particularly after the shock leads to reallocation into substitute low-priced stocks. The unchanged volatility and skewness of treated stocks confirm that investors react to salient prices rather than changes in lottery characteristics. At the stock level, expelling the low-price retail clientele produces the mirror image: liquidity deteriorates, price discovery slows, short-term reversals weaken, return co-movement re-sorts across price tiers, and valuations fall by 5%, with no concurrent change in fundamentals. A regulation designed to protect retail investors thus eliminates a source of market quality that benefited all participants, revealing a fundamental tension between investor protection and market quality in retail-dominated markets.
Presentations
CICF 2026 (scheduled), Syracuse University*, NUS, Five-Star Asia-Pacific Workshop in Finance 2026, 2nd HKU Next-Gen Finance PhD Workshop, Stony Brook University-SUNY*, University of Edinburgh*, Corvinus University of Budapest*
Observations from your Neighbourhood: Peer Effects on Investment Decisions
with Sumit Agarwal, Allaudeen Hameed, Chek Ann Tan
Company Fundamental Data Standardization Project
with David Hirshleifer, Karsten Müller, David Samuel, Siew Hong Teoh
