We examine stock price reaction to voluntary disclosure of innovation strategy by high-tech firms and its relation with insider stock transactions before the disclosure. We find that, despite the qualitative and subjective nature of strategy-related disclosure, there is positive stock price reaction to the disclosure. The evidence suggests that investors view the disclosure as credible good new...

It is shown that the volume of trade can be decomposed into proportional proxies for stochastic flows of good news and bad news into the market. Positive (good) information flows are assumed to increase the price of a financial vehicle while negative (bad) information flows decrease the price. For the majority of a sample of ten split-stocks it is shown that the proposed decomposition explains ...

Humans form beliefs asymmetrically; we tend to discount bad news but embrace good news. This reduced impact of unfavorable information on belief updating may have important societal implications, including the generation of financial market bubbles, ill preparedness in the face of natural disasters, and overly aggressive medical decisions. Here, we selectively improved people's tendency to inco...