We analyze the effect of alternative data on the informativeness of financial forecasts. Our hypothesis is that the emergence of alternative data increases the net benefit of collecting short-term information about firms' cash flows more than the benefit of collecting long-term information. If...

We analyze how computing power and data abundance affect speculators' search for predictors. In our model, speculators search for predictors through trials and optimally stop searching when they find a predictor with a signal-to-noise ratio larger than an endogenous threshold. Greater computing...

Firms significantly reduce their investment in response to non-fundamental drops in the stock price of their product-market peers. We argue that this result arises because of managers' limited ability to filter out the noise in stock prices when using them as signals about their investment...