Publication Type
Journal Article
Version
publishedVersion
Publication Date
1-2025
Abstract
In this paper, we use ChatGPT outages to provide early evidence on whether investors rely on generative artificial intelligence (GenAI) to perform professional tasks and the associated impact on stock price informativeness. We document a significant decline in stock trading volume during ChatGPT outages. The effect is stronger for firms with corporate news released immediately before or during the outages and for firms with higher ownership held by transient institutional investors. We then document declines in short-run price impact and return variance during the outage periods, consistent with reduced informed trading. Lastly, we document a positive effect of GenAI-assisted trading on long-run stock price informativeness. Overall, our findings indicate that a significant number of investors use ChatGPT in ways that influence their trading decisions and market outcomes. Future research can investigate the mechanisms underlying these GenAI effects and the potential risks of using GenAI for trading.
Keywords
ChatGPT, generative AI, information asymmetry, price informativeness, trading volume
Discipline
Accounting | Artificial Intelligence and Robotics
Areas of Excellence
Digital transformation
Publication
Journal of Accounting and Economics
Last Page
1
ISSN
0165-4101
Identifier
10.1016/j.jacceco.2025.101821
Publisher
Elsevier
Citation
CHENG, Qiang; LIN, Pengkai; and ZHAO, Yue.
Does generative AI facilitate investor Trading? Early evidence from ChatGPT outages. (2025). Journal of Accounting and Economics. 1.
Available at: https://ink.library.smu.edu.sg/soa_research/2088
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1016/j.jacceco.2025.101821