H7N9 not only endanger human health but also hit stock marketing

Jiang, Yan; Zhang, Yi; Ma, Chunna; Wang, Quanyi; Xu, Chao; Donovan, Connor; Ali, Gholam; Xu, Tan; Sun, Wenjie

The Chinese stock market is a new booming market with more individual customers but fewer institutional or professional investors compared to western contemporaries [10] . Hence, the behavior of the Chinese stock market is more likely to be reflective of individual decision making and thought processes. If we assume that any individual investor makes investment decisions based on their mood in a certain extent, and this mood is affected by events like infectious disease outbreaks, then we can assume that the Chinese stock market, given that investors are new and inexperienced with unrealistic expectations about stock market investments [11] , is likely to be more heavily impacted by changes in the mood because of the news. Thus, we can expect that news of an outbreak of a novel infectious disease like H7N9, together with overly negative emphasis through government warnings or sensationalist news reporting will encourage people to form a negative belief before it can be testified, according to the psychology study. Our hypothesis is that following this initial negative stage, the market will then trend downwards according to the "Model of Herd Behavior" before recovering to the normal price according to the "return to the central " theory [12] , as people gain better information and normalize their opinion on the true effect of the outbreak.