Behavioral finance FAQ / Glossary
(Information dissemination / transmission)

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Dates of related message(s) in the
Behavioral-Finance group (*):
Year/month, d: developed / discussed,
i: incidental

Dissemination, diffusion, transmission of information

00/12i - 03/9i + see information,
epidemic, percolating,
critical point,
viral, social learning curve, meme,
persistence, underreaction,

What you receive are pictures,
or just snow on the TV screen?

The transmission of information  (and also of
rumors )is usually not instantaneous nor perfect.

The development of communication tools has multiplied the dissemination
channels. But it has also multiplied the volume of information, creating
traffic jams and brain indigestions (see "information overload")

Thus many pieces of news have difficulty to pass all
traps and hurdles and reach the people
who could be interested (investors for example).

Dissemination deficiencies

When the pipeline is clogged.

There are various cases (see weak signals) in which the transmission
is deficient:

The dissemination can be very, very slow until the
    information is noticed (see percolation).

It can get lost in the pipe or in the sand and

never reach those who could use the information.

It can be hidden in the surrounding noise, an information 

overflow, or some more
(sensationalism) and /or repetitive information
(see noise, cognitive overload, weak signal, salience).

It can be asymmetric (see "asymmetry") by privileging
    some receivers: some people get informed immediately, others
    slowly or not at all.

Last but not least, it might be thwarted:

The message can become fully changed at some step of the
transmission, or at least excessively simplified, or loaded
with parasitic information (and also beliefs and
emotional attributes)

The "information" article gives more details about the quality and speed of
that diffusion,
drawn from the "theory of information".

Deficiencies of reactions

When the knee has strange reflexes.
Maybe it needs time to warm up.

Not only diffusion, but also reactions to information (see information,
reaction...) are often gradual.

This can contribute to a slow diffusion.

1) At the start, reactions might be slow

(sub diffusion / anti-persistence / under reaction)

2) The diffusion might soon abort and the information get lost.

      This is common if the critical mass (see that word) of people who
      react is  not reached.

3) But if that critical step (percolation threshold) is reached, after a -
    long  or short - time, then

     * not only the diffusion breaks through the mental walls of the
        receivers and make them react,

     * but the information might self-replicate and snowball exponentially
        (super diffusion / persistence / overreaction

Transmission in financial markets

Black holes in financial news.

Confusing void or overflow as
a side effect of transparency?

Contrarily to the assumptions used by the EMH (see that acronym), obstacles
to a widespread, fast and unbiased diffusion of relevant news
are found
even in the best organized financial markets.

In addition to the general limitations mentioned above, there are specific
practical reasons.

It is not easy to decrypt and sort all
and to grasp its financial consequences.

Whence some disinterest from senders (companies, institutions,
media) and receivers (investors and other economic players)

  Too specific or too complex information is obviously
     not widely
     Only the most specialized media are eager to get it and disseminate

  Some might find advantage at deceiving by creating and
a smoke screen (see deception, manipulation...)

(*) To find those messages: reach that BF group and, once there,
      1) click "messages", 2) enter your query in "search archives".

Members of the BF Group, please
 vote on the glossary quality at
BF polls


   This page last update: 22/08/15       

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