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Does Generative AI Facilitate Investor Trading? Evidence from ChatGPT Outages

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The paper 'Does Generative AI Facilitate Investor Trading? Evidence from ChatGPT Outages' by Qiang Cheng, Pengkai Lin, and Yue Zhao examines the impact of ChatGPT outages on investor trading and stock price informativeness. It documents a decrease in trading volume, short-run price impact, return variance, and bid-ask spreads during outages, especially for firms with concurrent news releases. The study constructs a firm-specific measure for GAI-assisted trading intensity and suggests a positive correlation with long-term price informativeness.

  • Decrease in stock trading volume during ChatGPT outages
  • Stronger effect for firms with news during outages
  • Decline in short-run price impact
  • Lower return variance and bid-ask spreads observed
  • GAI-assisted trading linked to better long-term price informativeness