Press release: Software traces opinions and moods

Nr. 133/2012 - 13.07.2012

EU research project FIRST trawls social media for expert knowledge related to financial markets

(pug) Scientists involved in the EU project FIRST have developed a prototype for software that can extract and analyse the “moods” of financial market players almost in real time, based on their communication in social media and networks like Twitter or Facebook. Researchers Professor Jan Muntermann und Irina Alic from the Faculty of Economic Sciences at the University of Göttingen participated in the project, among others.

The price fluctuations observed in financial markets are directly tied to the behaviour of market actors. The opinions, moods and feelings of these actors are thus increasingly being seen as a valuable source of information for real-time assessment of events related to financial markets. The challenge is to filter correct and reliable information out of the massive flood of heterogeneous and volatile sources of data in social networks. The objective of the research project, therefore, is the development of software solutions for the systematic analysis of unstructured data, as well the extraction of relevant information, in order to support financial decisions.

The researchers from Göttingen are currently paying particular attention to possible problem areas such as reputation risks and market manipulation, among other things. “For example, we’re developing predictive models that identify false reports. In this way, the user gets an idea as to whether certain reports are suspected to have been manipulated”, says Prof. Muntermann. As exemplified by the worldwide financial crisis, the loss of trust associated with reputation risks can pose a threat to the stability of global financial markets. The objective of potential manipulation may be to spread particularly positive but false information in order to artificially increase the demand for a specific financial instrument, thereby also manipulating its price. The results of the project can also be used in the context of trade monitoring and financial market regulation.

The EU research project FIRST was started in October of 2010 and is scheduled to run for three years. Apart from the University of Göttingen, a total of eight partners from the areas of science and economics from Germany, Italy, Slovenia and Spain are participating. The project has an overall budget of close to 4.6 million euros at its disposal. Further information and videos about the project can be found online at http://project-first.eu/ and http://videolectures.net/first/.

Contact:
Prof. Dr. Jan Muntermann
Georg-August-Universität Göttingen
Faculty of Economic Sciences
Chair of Electronic Finance and Digital Markets
Platz der Göttinger Sieben 5, 37073 Göttingen
Phone +49 551 39-20042
Email: muntermann@wiwi.uni-goettingen.de
Internet: www.efinance.uni-goettingen.de