³ÉÈËÊÓƵ Business School represented at EFiC Conference in Italy
This July, Ayan Orujov, one of the faculty members, will represent our Business School at the prominent Essex Finance Centre (EFiC) Conference in Banking and Corporate Finance in Gaeta, Italy. This prestigious event, organised by the EFiC at Essex Business School and the Laboratory of Bank, Business, Finance, and Ethics (BifeLab), will feature a rich amalgamation of leading academics, practitioners, and policymakers.
Ayan, with his co-author Laurence Jones, is set to introduce a new paper at the conference that intersects the realms of sports, sentiment, and financial decision-making. This work builds on established literature, delving into a captivating, yet little-explored aspect of retail investor behaviour and the stock market's susceptibility to sentiment.
Drawing from sports phenomena and its bearing on society, Ayan and Laurence explore the intriguing underdog triumphs in sports and their potential impact on retail investor trading. They propose that such surprising outcomes in sports, against the expected norm, can significantly boost the mood of retail investors, leading to increased stock buying. The research hinges on the key idea of the sentiment-driven decisions of retail investors, particularly evident during the recent 'meme-stock frenzy.'
The paper attempts to disentangle the psychological components underpinning support for the underdog. It separates underdog victories involving the most 'hated' teams, showing that Schadenfreude — pleasure derived from another's misfortune — is the dominant effect, particularly for more surprising sporting outcomes.
Besides, the research delves into the duration of the sentiment boost following unexpected sporting victories, and its bearing on retail investor behaviour and, potentially, stock returns. They also explore how specific stock characteristics may make them more susceptible to changes in sentiment.
Ayan and Laurence’s exploration into this novel area contributes significantly to the literature on the effect of incidental mood on investor decision making and the impact of sporting events on investors and the stock market. It further enhances our understanding of the role of sentiment on retail investor behaviour.
The paper promises to add a new dimension to our understanding of the financial markets' complex interplay with societal elements. The EFiC Conference in Banking and Corporate Finance provides the ideal platform for this exploration, fostering engaging discussions and opportunities for feedback from a diverse range of experts in the field. We are confident that Ayan’s participation will reflect well on our school and contribute meaningfully to the body of research in this area.