Online reviews of products, shops, hotels etc. are very common, but are they helpful? Hotels, for example, could receive fictitious negative reviews from neighbouring hotels or they could even give themselves fictitious positive reviews. You can read an interesting piece over at Slate on the economics of internet reviews. Click here for an academic paper which empirically investigates the authenticity of online promotional reviews by comparing reviews on Tripadvisor with those on Expedia.
Daron Acemoglu, Simon Johnson, Amir Kermani, James Kwak and Todd Mitton have written a paper on whether firms connected to Timothy Geithner benefited from these connections. They do so by looking at how stocks of these firms reacted to the announcement that he was a nominee for Treasury Secretary in November 2008. They find that there were large abnormal returns for connected firms. Below is the paper's abstract and the full paper is available here . The announcement of Timothy Geithner as nominee for Treasury Secretary in November 2008 produced a cumulative abnormal return for financial firms with which he had a connection. This return was about 6% after the first full day of trading and about 12% after ten trading days. There were subsequently abnormal negative returns for connected firms when news broke that Geithner's confirmation might be derailed by tax issues. Excess returns for connected firms may reflect the perceived impact of relying on the advice of a small ne...