Leading by algorithm: Reconfiguring the nature of leadership in digitalized work environments, 1 500 tkr, Nick Butler, Management section

The project examines the development and application of digital leadership tools in high-performance organizations. Our aim is to gain insights into how data-driven analytics are transforming the nature and scope of leadership in digitalized work environments. The project addresses two main questions: 1) How is the task of leadership transformed by algorithms? 2) How do data-driven analytics affect the leader-follower relationship?

The project explores the opportunities and challenges faced by organizations in which soft leadership skills are blended with automated inputs. The data collection process is based on a qualitative methodology, drawing on semi-structured interviews with product developers and senior managers as well as observations of key strategic meetings in participating organizations.

Corporate information, trading, and equity market liquidity, 1 500 tkr, Lars Nordén, Finance section

According to the efficient markets’ hypothesis, equity market prices reflect all relevant information. Firms disclose corporate information through, e.g., quarterly announcements and other news releases. When the news becomes public, it is incorporated into stock prices either by market makers updating their outstanding quotes, or by investors trading on the information. Private information must be traded on to be incorporated into prices. Uninformed investors, like retail traders, rely on efficient markets to get fair prices when they trade. When market makers face the risk of trading with informed investors, they provide less liquidity.

We investigate how firms’ information and informed investors’ trading affect equity market liquidity, and how to properly measure these effects.

Exploring the new finance: Meme stocks, melt-ups, and going green, 1 800 tkr, Håkan Jankensgård, Finance section

In this project, we will investigate how retail investors behave and perform in response to several new and puzzling phenomena that have appeared in the financial markets in recent years. Following the financial crisis in the late 2000s, the world experienced a prolonged period of relative stability that turned out to profoundly alter the way the markets viewed risk and return. During the Covid-19 pandemic, retail investing experienced a renaissance as people with too much time and money on their hands took to stock market investing, and social media became a force to be reckoned with.

Partly as a consequence of this, the financial vocabulary has had to be extended to include, for example, so-called “meme-stocks” and “melt-ups”, which is to say a highly local and social media-driven boom. Around the same time, an increasing demand for “green assets” started to affect how capital is allocated and, by extension, how assets are priced.

Our research will probe into how retail investors help generate these phenomena and how they ultimately perform in them. More knowledge about these matters is desirable because this investor category is often made out to be less sophisticated and in need of the regulators’ protecting hand, although, intriguingly, anecdotal evidence suggest that their usage of social media has occasionally given them the upper hand. In pursuing this knowledge, we will benefit from access to unique high-frequency ownership lists that allow us to learn about financial markets from a new angle compared to the traditionally used order books.