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Association between Stock Market Gains and Losses and Google Searches

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  • Eli Arditi
  • Eldad Yechiam
  • Gal Zahavi

Abstract

Experimental studies in the area of Psychology and Behavioral Economics have suggested that people change their search pattern in response to positive and negative events. Using Internet search data provided by Google, we investigated the relationship between stock-specific events and related Google searches. We studied daily data from 13 stocks from the Dow-Jones and NASDAQ100 indices, over a period of 4 trading years. Focusing on periods in which stocks were extensively searched (Intensive Search Periods), we found a correlation between the magnitude of stock returns at the beginning of the period and the volume, peak, and duration of search generated during the period. This relation between magnitudes of stock returns and subsequent searches was considerably magnified in periods following negative stock returns. Yet, we did not find that intensive search periods following losses were associated with more Google searches than periods following gains. Thus, rather than increasing search, losses improved the fit between people’s search behavior and the extent of real-world events triggering the search. The findings demonstrate the robustness of the attentional effect of losses.

Suggested Citation

  • Eli Arditi & Eldad Yechiam & Gal Zahavi, 2015. "Association between Stock Market Gains and Losses and Google Searches," PLOS ONE, Public Library of Science, vol. 10(10), pages 1-12, October.
    • Handle: RePEc:plo:pone00:0141354
    DOI: 10.1371/journal.pone.0141354
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    Cited by:

    1. Muhammad Omar & Arif Mehmood & Gyu Sang Choi & Han Woo Park, 2017. "Global mapping of artificial intelligence in Google and Google Scholar," Scientometrics, Springer;Akadémiai Kiadó, vol. 113(3), pages 1269-1305, December.
    2. Román Alejandro Mendoza Urdiales & Andrés García-Medina & José Antonio Nuñez Mora, 2021. "Measuring information flux between social media and stock prices with Transfer Entropy," PLOS ONE, Public Library of Science, vol. 16(9), pages 1-19, September.

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