Faster internet access makes the stock market less efficient by distracting investors with viral 'meme' content instead of financial data.
March 31, 2026
Original Paper
Attention Allocation and Price Discovery
SSRN · 6474762
The Takeaway
Using the rollout of 3G mobile broadband as a test, researchers found that better information access actually slowed down how quickly news was reflected in stock prices. Instead of using high-speed data to research companies, investors reallocated their limited attention toward high-salience, popular stocks, causing the market to become more homogenized and less accurate.
From the abstract
We study how the allocation of investor attention shapes price discovery. When the cost of accessing public information falls, investors may reallocate attention from firmspecific signals toward common, high-salience content. This reallocation can compress idiosyncratic volatility while slowing the incorporation of information into prices. We formalize this in a model of limited attention and short-side crowding. To test these predictions, we exploit the staggered rollout of mobile broadband (3G