The dynamics of online social interactions and implications on stock market returns
Journal of Economic Interaction and Coordination, vol.21, no.3, pp.631-659, 2026 (SSCI, Scopus)
- Publication Type: Article / Article
- Volume: 21 Issue: 3
- Publication Date: 2026
- Doi Number: 10.1007/s11403-026-00483-5
- Journal Name: Journal of Economic Interaction and Coordination
- Journal Indexes: Social Sciences Citation Index (SSCI), Scopus, IBZ Online, ABI/INFORM, EconLit
- Page Numbers: pp.631-659
- Keywords: Investor sentiment, Reddit, Social media, Social networks, Stock returns
- Galatasaray University Affiliated: Yes
Abstract
This study examines the relationship between online social interactions, sentiment dissemination, and stock market returns using Reddit data. We find that a small number of active users significantly influence others by disseminating sentiment within their networks. Active users have a more pronounced influence on less-active users when they share similar beliefs and during periods of increased uncertainty. Moreover, we show that prior-day abnormal network sentiment positively affects future stock market returns. Finally, we evaluate a network-based market timing strategy that effectively reduces drawdowns and highlights the practical implications of online interactions.