Finance seminar - Professor Xiaoyan Zhang - Tsinghua PBC

A seminar by Professor Xiaoyan Zhang from Tsinghua PBC

Title: AI, Opinion Ecosystems, and Finance *

Abstract: Generative AI use for content generation is associated with divergent outcomes
on different financial social media platforms: indications of reasoning
enhancement on Seeking Alpha, and of belief distortions on WallStreetBets. On
Seeking Alpha, adoption is associated with information frictions. AI-assisted postings
tilt toward analysis/credibility, and their sentiment positively predicts future
returns. Use of AI is associated with more informative retail order flow and lower
bid-ask spreads. In contrast, AI adoption on WallStreetBets follows surges in retail
buying, and AI-assisted content is associated with emotionality and sentiment
contagion. Such content precedes higher trading volume, greater volatility,
and more lottery-like return distributions.

Co-authors: David Hirshleifer, Lin Peng Qiguang Wang, Weichen Zhang

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