Dear Faculty and Fellow Ph.D. Students,

I cordially invite you to attend my dissertation defense scheduled for Wednesday, December 4th, from 9:15 AM to 10:45 AM EST. The defense will be held in Room 221 at the Scheller College of Business.

You are also welcome to join remotely via Zoom: https://gatech.zoom.us/j/8374913331

The dissertation abstract is included below. Copies of the dissertation are available upon request.

 

Best,

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Ruiqi (Rich) Zhu

Ph.D. Candidate

Information Technology Management, Scheller College of Business

Georgia Institute of Technology 

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Area: Information Technology Management

Committee Members: Dr. Sridhar Narasimhan (Co-chair), Dr. Yu Jeffrey Hu (Co-chair, Purdue University), Dr. Eric Overby, Dr. Mingxi Zhu, Dr. Cheng He (University of Wisconsin-Madison)

Title: Retail Investor Behaviors on Technology Platforms

Abstract:

This dissertation examines retail investor behaviors on technology platforms, focusing on the impact of recommender systems, robo-advisors, and social media on retail investors' behaviors.

 

The first essay examines impact of product recommendations on retail investors’ mutual fund investments. The findings indicate that investors tend to follow the recommendations when they make mutual fund purchases. However, only investors of low socioeconomic status (SES) suffer significantly worse investment returns after purchasing recommended funds. To explain this disparity, I find investors with low socioeconomic status tend to gather less information and expend reduced effort in fund research when buying recommended funds. Furthermore, those investors tend to hold recommended funds for a significantly shorter time and their purchase of recommended funds experiences a significantly larger price reversal than non-recommended funds. In summary, product recommendations disproportionately lead lower socioeconomic status investors to make irrational investment decisions, exacerbating financial harm for those who are most vulnerable in the market.

 

The second essay examines the impact of stimulus checks on retail investors’ interaction with robo-advisors. After receiving stimulus checks, investors significantly increase their lumpsum investments to robo-advisors. This increase is most significant for investors with lower income, younger age, higher risk tolerance, and previously rely on robo-advisors more. This increase in lumpsum investments mostly go to short-term investment accounts rather than long-term retirement accounts. Investors also increase their number of roundups investments and decrease their number of withdrawals from robo-advisors. 

 

The third essay analyzes merger and acquisition rumors on social media platforms for retail investor using data from Seeking Alpha. Findings reveal that rumors about firms with higher attention and more bullish authors on Seeking Alpha are more likely to be accurate, while those with negative sentiment are less credible. Firms involved in true rumors exhibit higher abnormal returns, reflecting the market’s partial ability to assess acquisition probabilities. Retail investors are particularly influenced by Seeking Alpha authors’ disclosures, favoring stocks with more long-position disclosures.