Behavioral finance FAQ / Glossary
(Information dissemination / transmission)
This is a separate page of the D, I-L, Information and T-U sections of the Glossary
Dates of related message(s) in the
Behavioral-Finance group (*):
Year/month, d: developed / discussed,
Dissemination, diffusion, transmission of information
00/12i - 03/9i + see information,
epidemic, percolating, critical point,
viral, social learning curve, meme,
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
the traps and hurdles and reach the people
who could be interested (investors for example).
When the pipeline is clogged.
There are various cases (see weak signals) in which the transmission
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
blatant (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
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 -* not only the diffusion breaks through the mental walls of the
long or short - time, then
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
It is not easy to decrypt and sort all
information and to grasp its financial consequences.
Whence some disinterest from senders (companies, institutions,Too specific or too complex information is obviously
media) and receivers (investors and other economic players)
not widely published.
Only the most specialized media are eager to get it and disseminate
Some might find advantage at deceiving by creating and
keeping 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