Purchase deadline as a moderator of the effects of price uncertainty on search duration

Lemieux, James; Peterson, Robert A.

doi:10.1016/j.joep.2010.10.005

Cited by 42 publications

(25 citation statements)

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“…2 Examples come from various disciplines. In the field of economic psychology, individuals respond to greater uncertainty by intensifying their search for more information (Lemieux and Peterson, 2011). In economics, imperfect (noisy) and sticky information models predict that "more volatile shocks [greater uncertainty] lead to the more frequent updating of information, since inattentiveness is costlier in a world that is rapidly changing" (Reis, 2006, p. 803), and that "more tranquil times should be ceteris paribus associated with greater information rigidities" (Coibion andGorodnichenko, 2015, p 2674).…”

Section: The Conceptual Framework Of the Eurq Indexmentioning

confidence: 99%

Uncertainty, Perception and the Internet

et al. 2019

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Macroeconomic uncertainty consists of three components: the unobservable, the heterogeneous and the "uncertain". We are unaware of exactly when economic agents perceive uncertainty and which type of uncertainty interests them. This paper introduces and outlines a way of conducting large-scale data searches on the Web. We create the EURQ index of "economic uncertainty related queries" for both the USA and Italy. We show that the EURQ encapsulates agents' need to gather more information during periods of uncertainty. This need either spontaneously arises in the case of macro-real and political uncertainty, or is induced by the media in the case of normative and financial uncertainty. This distinction is extremely important when trying to understand the immediate impact of fiscal policy uncertainty on economic variables, and how financial shocks can produce a significant short-term impact on economic activity. It is also helpful when trying to solve the identification and endogeneity issues encountered in the literature when assessing the role of uncertainty.

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Section: The Conceptual Framework Of the Eurq Indexmentioning

confidence: 99%

Uncertainty, Perception and the Internet

et al. 2019

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“…In the spirit of Dzielinski (2012), we propose three novel measures of policy-related uncertainty relying on the volume of internet searches: (i) an index based on the volume of Google searches on the word 'US stock market'; (ii) an index based on the volume of Google searches on the word 'US politics'; (iii) an index based on the volume of Google searches on the word 'US Fed'. 1 As suggested by the economic psychology literature (see Da et al, 2011;Liemieux and Peterson, 2011), our Google-search-based metrics are designed to reflect the degree of agent attention to policy-related issues.…”

Section: Introductionmentioning

confidence: 99%

Google search-based metrics, policy-related uncertainty and macroeconomic conditions

Donadelli

2014

Applied Economics Letters

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We propose three novel measures of policy-related uncertainty based on the volume of Google searches for (i) 'US stock market'; (ii) 'US politics'; (iii) 'US Fed'. In a VAR context, we find that a Google-search-based uncertainty shock has sizable adverse effects on US macroeconomic conditions. In particular, it produces (i) a drop in industrial production, consumer sentiment, equity prices, long-term rates and consumer credit; (ii) a rise in the unemployment rate. These effects are nearly identical to those generated by a shock to a standard policy-related uncertainty indicator. Our empirical findings suggest that a rise in the volume of internet searches for economic policy-related topics is a symptom of increasing uncertainty. It turns out that the proposed Google-search-based metrics meet standard policy-related uncertainty indicators.

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“…On the other hand, studies in economic psychology consistently find that the typical response to uncertainty is by increasing information search (see e.g. Liemieux and Peterson (2011) and the references therein).…”

Section: Introductionmentioning

confidence: 99%

Measuring economic uncertainty and its impact on the stock market

Dzieliński

2012

Finance Research Letters

194

102

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This paper proposes a novel measure of economic uncertainty based on the frequency of internet searches. The theoretical motivation is offered by findings in economic psychology that agents respond to increased uncertainty by intensifying their information search. The main advantages of using internet searches are broad reach, timeliness and the fact that they reflect actions, rather than words, which however are not directly related to the stock market. The search-based uncertainty measure compares well against a peer group of alternative indicators and is shown to have a significant relationship with aggregate stock returns and volatility. Abstract: This paper proposes a novel measure of economic uncertainty based on the frequency of internet searches. The theoretical motivation is offered by findings in economic psychology that agents respond to increased uncertainty by intensifying their information search. The main advantages of using internet searches are broad reach, timeliness and the fact that they reflect actions, rather than words, which however are not directly related to the stock market. The search-based uncertainty measure compares well against a peer group of alternative indicators and is shown to have a significant relationship with aggregate stock returns and volatility.Measuring economic uncertainty and its impact on the stock market. AbstractThis paper proposes a novel measure of economic uncertainty based on the frequency of internet searches. The theoretical motivation is offered by findings in economic psychology that agents respond to increased uncertainty by intensifying their information search. The main advantages of using internet searches are broad reach, timeliness and the fact that they reflect actions, rather than words, which however are not directly related to the stock market. The search-based uncertainty measure compares well against a peer group of alternative indicators and is shown to have a significant relationship with aggregate stock returns and volatility.

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Purchase deadline as a moderator of the effects of price uncertainty on search duration

Cited by 42 publications

References 43 publications

Uncertainty, Perception and the Internet

Uncertainty, Perception and the Internet

Google search-based metrics, policy-related uncertainty and macroeconomic conditions

Measuring economic uncertainty and its impact on the stock market

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