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Investor Sentiment Contagion: An Industry Perspective of Investors' Heterogeneity Presented by “Informational Cycle Cascade” With AI's Algorithm

Investor Sentiment Contagion: An Industry Perspective of Investors' Heterogeneity Presented by “Informational Cycle Cascade” With AI's Algorithm
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Author(s): Feng Sun (South China Normal University, China)
Copyright: 2025
Pages: 32
Source title: Behavioral Finance and AI Tools for Sustainability
Source Author(s)/Editor(s): Fouad Daidai (University Chouaib Doukkali, Morocco), Mimoun Benali (Sidi Mohamed Ben Abdellah University, Morocco)and Larbi Tamnine (Sidi Mohamed Ben Abdellah University, Morocco)
DOI: 10.4018/979-8-3693-9684-1.ch004

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Abstract

This chapter uses the FEM algorithm of artificial intelligence (AI) to analyze the rule of investor sentiment contagion under “informational cycle cascade”. There are five big up or down phases of investor sentiment contagion for the industry average at the whole period. Bad information contagion under the influence of the global finance crisis and good information contagion under the influence of an economic stimulating plan of on big scale indicate that investor sentiment contagion differentiates between the up phase and down phase. The FEM coupling model of investor sentiment is created to compute and analyze investor sentiment contagion among the industries. Cloud picture presents the average space distribution of investor sentiment contagion. In the real capital market, some investors often adjust their investment decisions, and the informational cycle cascade can well explain this phenomenon.

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