What motivates Molly Mercer to teach and conduct research at DePaul? “Making a difference in someone’s life,” the associate professor of accountancy will tell you.
And that she has.
Mercer, who joined DePaul in 2009, gets high marks from her students for her energy in the classroom and the personal interest she shows toward promoting their success. She has won numerous teaching accolades during her career, including DePaul’s Excellence in Teaching Award in 2012. The high quality of her research also has attracted recognition—she was named Winner, Best Paper in Behavioral Finance, by the Midwest Finance Association at its 2009 conference. (See why Mercer loves teaching at DePaul.)
In the Q & A below, Mercer talks more about the rewards of teaching at DePaul, and also discusses her recent research that tracks how comments posted on popular online stock message boards such as Yahoo! Finance affect investor behavior.
Q: What do you think makes a DePaul business education distinctive?
Mercer: DePaul focuses on students. Class sizes are small, so students get to know their professors and each other. Our location in downtown Chicago and our strong alumni base are also important. Many alumni keep strong ties to DePaul and provide important mentoring for our current students.
Q: What made you decide to teach at DePaul?
Professors allocate most of their work time between creating knowledge via research and disseminating knowledge via teaching. Different universities place different weights on the relative importance of research and teaching. I was drawn to DePaul because the teaching/research balance is a good fit for me. DePaul faculty members have the time and resources to conduct useful research projects but do not lose sight of the importance of teaching. Students are important to me, and the students I’ve taught at DePaul are a real joy to teach. They are responsible, hardworking and kind—who could ask for more?
Q: Your expertise melds accountancy and psychology. How did you get interested in the intersection of these two fields?
My undergraduate degree is in accounting. When I decided to pursue a PhD, accounting was a natural fit, given my background and interests. During my PhD program at the University of Texas, the research topics that most interested me related to the psychological processes underlying accounting judgments and investment decisions. So I took a few psychology courses to see what I could learn, and I was hooked.
Q: Your past research projects have focused on financial reporting credibility and the psychology of investment decisions. Tell us about one of your current research and what investors can learn from the findings.
One project I am currently working on investigates whether individual investors are influenced by stock message boards, such as those found on the Yahoo! Finance, Raging Bull and Motley Fool websites. Yahoo! Finance alone offers message boards for over 6,000 stocks, with more than 580 million posts over a recent six-year period. Though there is undoubtedly some useful information on these message boards, the majority of posts appear to be pure opinion or unfounded rumor. Despite this, many individual investors peruse these boards. What is not clear is whether investors read these message boards for entertainment or whether they actually make investment decisions based on what they read there.
My coauthors and I designed a controlled experiment to investigate this issue. We provided investors with information from a stock message board for a fictitious company. This message board contained only opinion-based posts (e.g., ‘this stock stinks’ or ‘this stock is going through the roof’). We varied the tone of the posts (negative or positive) and also provided investors with more credible investment information such as financial statements and a description of the company’s business. Investors were able to choose which information to view and were asked to make a decision about whether to invest in the company.
When we analyzed investors’ responses, we found that many were influenced by the tone (positive or negative) of the message board, even though the board didn’t contain any real information. We also asked investors whether they thought that they should use message board content when making investment decisions and whether the message board did influence their decision in this case. Even investors who told us that they should not and did not use the message board content were actually strongly influenced by it.
These results suggest that once we view a stock message board, it is difficult to ignore its content, even if we want to. I suspect that many investors peruse message boards hoping to find nuggets of relevant information, believing they can ignore the rest. Our study suggests that this may be impossible.