#Twitter: Examining the Impact of Earnings Format Choice and Rehashing Prior Positive Information on Market Prices

Abstract

Using Twitter to disseminate information has two advantages: flexibility in presentation formats and the ability to redisclose a prior period’s information—referred to as “rehashing.” Our research examines the effect of these issues on market investors’ trading. Our experimental market results suggest that nonprofessional investors presented with whole-number quarterly earnings exhibit insensitivity to the large numbers (i.e., psychophysical numbing). Further, we find evidence suggesting that investors in the whole-number condition net the rehashed quarterly earnings information with current quarterly earnings information to counteract the psychophysical numbing effects, whereas those in the earnings per share (small-number) condition display a representativeness bias toward positive news when processing the rehashed information. Our results indicate that a firm can influence investor decisions when managers strategically disseminate larger whole numbers and rehash positive earnings information. Thus, our findings contribute novel information to the extant social media literature. Data Availability: Data are available from the first author upon request.