User Anonymity and Information Quality of Social Media: Evidence from a Natural Experiment
Prof. Tianyu Zhang
President Chair Professor of Accounting
Shenzhen Finance Institute
School of Management and Economics
The Chinese University of Hong Kong (SZ)
Using the China Cybersecurity Law as an exogenous shock, we study the effect of the real-name verification on the information quality of user-generated content on social media. Exploiting the differential timing of implementation of the real-name verification policies by two most popular stock social media platforms in China and a difference-in-difference study design, we find that the information quality of the treatment platform significantly improved after the adoption of real-name verification policy over that of the control platform, consistent with real-name verification playing a disciplining role. Further analyses suggest that the improvement in information quality mainly comes from changes in the behavior of the continued users who stay on after the new policy, and is mostly attributable to users who were highly active in the pre-policy period becoming more prudent in posting after experiencing the disciplining policy shock. Overall, our results show that real-name verification can have disciplinary effects on the information quality of social media.