A Theory of Financial Media

A Theory of Financial Media

Eitan Goldman, Jordan Martel, Jan Schneemeier

Series number :

Serial Number: 

Date posted :

March 18 2020

Last revised :

March 18 2020
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  • FInancial Journalism • Disclosure • Obfuscation • Price Quality

We develop a model of financial media in which some investors only observe firm announcements that are covered by journalists. The introduction of journalists induces more informed trading by readers, but inadvertently incentivizes the manager to obfuscate announcements. We argue that this obfuscation arises in spite of journalists, not because of them.

Although the stock becomes mis-priced, readers are better off and prices are more informative. We find two endogenous biases: extreme financial news is more likely to be reported than mundane news and good news is more likely to be reported than bad news.


Real name:
Jordan Martel
Real name:
Jan Schneemeier