Topic:

Who Moved My Cheese? Algorithm Reactance in Online Investment Communities

Time&Date: 

10:30 am - 12:00 pm, March 26, 2024 (Tuesday)

Venue

Room 619, Teaching A Building

Zoom Link: 
https:

https://cuhk-edu-cn.zoom.us/j/3985407949?pwd=QnZJMHU3SDUwaFdtWTF6N3RWcGlMdz09 
Meeting ID: 398 540 7949
Passcode: 779898

Speaker:

Dr. Zhiya Zuo (City University of Hong Kong)

Algorithms are being increasingly adopted in online investment communities (OICs) to generate algorithmic predictions of stock performance for OIC content consumers (i.e., investors). Nevertheless, such predictions may pose an identity threat to the OICs' key content producers (mainly consisting of non-professional human analysts), who analyze and forecast stock performance through their content generation in OICs (i.e., analysis articles). We investigate how analyst content generation is adapted in response to the introduction of algorithmic predictions in OICs. Drawing on identity control theory and coping theory, we theorize analysts' coping responses under algorithmic identity threat as an algorithm reactance effect, which manifests in two forms, namely, algorithm resistance and self-elevation. We further elaborate on the contingent role of algorithm performance in influencing the intensity of the reactance effect. Applying a regression discontinuity in time design, we empirically tested the theorized reactance effect using a unique dataset from Seeking Alpha, an OIC that rolled out algorithmic predictions in May 2019. We found that analysts exhibited lower forecast quality owing to derogation (i.e., algorithm resistance) when algorithmic predictions were accurate. Moreover, irrespective of algorithm performance, analysts demonstrated growing productivity and self-mention in their analysis articles (i.e., self-elevation). Our study reveals a novel, nuanced algorithm reactance effect in a human algorithm interaction context and offers managerial implications for next-generation algorithm-empowered OICs.

Biography:

Zhiya Zuo is an Assistant Professor at the Department of Information Systems at the City University of Hong Kong. Before that, he obtained his Ph.D. in Information Science from the University of Iowa. His research has been funded by the National Natural Science Foundation of China. His research interests include social media engagement, virtual teams, and blockchain-enabled businesses.