Determinants of Poster Reputation on Internet Stock Message Boards
DOI : 10.3844/ajebasp.2009.114.121
American Journal of Economics and Business Administration
Volume 1, 2009
Problem statement: I investigate the determinants of poster reputation in a user-rewarding reputation system on Thelion!WallStreetPit stock message board. My empirical analyses deal with two hypotheses: First, is a poster’s reputation affected by his/her characteristics at the time the message was posted? Second, is reputation also associated with the characteristics of the stock to which the message refers? Approach: To answer these two questions, I tested two sets of explanatory variables in relation to poster reputation in two fixed-effects panel regressions. Results: First, the poster’s popularity in the community, the poster’s sentiment, information quality not quantity and one day follow-up opinion on the stock all have positive impacts on the poster’s reputation; Second, recommending stocks with high price to earnings ratio and high institutional investors holding percentage reduce the chance of receiving reputation credits while promoting high liquidity stocks did the opposite. Conclusion: This study discarded light on the future construction of a credit-weighted sentiment index should the researchers consider weighing each poster’s sentiment based on its reputation. This study also helped us to build a more effective and better functional reputation system in the future. Finally, findings in this study allowed us to better examine the relationship between sentiment and stock returns in future studies.
© 2009 Ying Zhang. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.