Here ' s an idea : Knowledge sharing among competitors to build a critical mass

Knowledge sharing among competitors is counterintuitive; however, it has been found to occur in the economy under certain conditions. Recently, in the investment industry, platforms with the goal of promoting knowledge sharing among investment professionals have emerged. This knowledge sharing is noteworthy for two reasons: (1) the conditions that have previously been found to sustain knowledge sharing among competitors are not present, and (2) it is at odds with the neoclassical efficient-market hypothesis (EMH). Using a limitation of the EMH framework, I posit that expectations regarding the strength of the market's efficiency for a stock, measured as the amount of information available about that firm and the level of scrutiny it faces from key market institutions, plays an important role in sustaining this knowledge sharing. Using a unique dataset of knowledge sharing among investment professionals, on an online platform, this study leverages variation in the platform's sharing structure to test this theory. I find that knowledge sharing is most prominent for stocks that have less information available and that face a lesser degree of scrutiny from key market institutions. These findings highlight how market inefficiencies can sustain knowledge sharing among competitors, especially when a critical mass is needed. Thesis Supervisor: Ezra W. Zuckerman Title: Alvin J. Siteman (1948) Professor of Entrepreneurship and Strategy, Professor of Technological Innovation, Entrepreneurship, and Strategic Management