‘Noise’ Researchers

In 1986, Fischer Black delivered his presidential address to the American Finance Association, with an elegant title “Noise” (click here to see the published version in Journal of Finance). This seminal paper by Black (1986) formally identifies noise traders as traders who “trade on noise as if it were information”. His address is path breaking because classical financial theories always assume that investors only react to new fundamental information. My 2010 paper in Macroeconomic Dynamics conjectures that the weak private property rights protection in low-income economies deters the participation of informed arbitrageurs, leaving these emerging markets dominated by sentiment-prone noise traders.

In this post, I want to share a unique environment in the local academia. Noise researchers here are not referring to researchers who specialize in the area of noise. Instead, the term refers to those researchers (just like investors) who write (trade) based on noise, rather than genuine interest/curiosity/passion (fundamental information).

What are the noises that I refer to? Examples from my personal and colleagues’ observations are:

  1. When a researcher always write solo papers, he will hear noises saying that this is a selfish act and he is not contributing to mentoring;
  2. When a researcher always write joint papers, the noises accuse him of leveraging on others;
  3. When a researcher is the third and last author, he is accused of playing a minor role and even to the extent of being labeled as free-rider;
  4. When a researcher is first author, the noises will still be around because he is not the corresponding author;
  5. When a researcher works exclusively on a niche area, he is accused of not practicing the golden rule of diversification (too specialize!);
  6. When a researcher publishes on different areas, the noise-makers then raise the issue of him not having an area of expertise;

The list will go on, depending on the weak spots that the noise-makers are able to identify in one’s CV. I sympathize with those early career researchers (ECR) who sometimes were affected by these noises. They were perplexed. In certain cases, they gave up writing.

In the case of noise trading, the recommended policies are generally directed at noise traders. However, in the present context, noise researchers are innocent. Those noise-makers are adding unnecessary pollutants to the already not so conducive local research environment, as compared to universities in advanced nations.

I would urge those noise-makers: If you cannot contribute significantly to academia, let the informed researchers do it! Without your noises, noise researchers will naturally die off. Without your noises, research will be driven by genuine interest/curiosity/passion. Without your noises, Malaysia will be able to retain and attract more talented researchers.