This study seeks to explain the emergence of fat-tailed distributions of trading volumes and asset returns in financial markets. We use a rational expectations form of the herding model. In the model, traders infer other traders' private signals regarding the value of an asset by observing their...

We examine the effect of financial markets on the tone manipulation of earnings press releases by CEOs. We find that CEOs with high compensation convexity are significantly more likely to employ positive tone management right after recent high industry returns. Further analysis shows that this...

Crises in financial markets affect humans worldwide. Detailed market data on trading decisions reflect some of the complex human behavior that has led to these crises. We suggest that massive new data sources resulting from human interaction with the Internet may offer a new perspective on the...