How ‘Spillover’ Effects Can Skew AI Securities Class Actions: Brattle Economists Discuss in New Law360 Article
Published by Law360
A growing body of evidence shows that AI-related news that hits the market shifts expectations not only about the company at issue but also about related – or seemingly unrelated – industries and the broader market. Such spillover effects may contaminate event study results.
While spillover contamination is not a new issue, it can be more pronounced in the current AI environment. Senior Associate Dr. Erik Johannesson, Senior Research Analyst Olivia Wurgaft, and Principal Dr. Nguyet Nguyen use real-world examples to illustrate economic spillover effects, discuss their implications in the AI era, and outline practical considerations for experts and litigation counsel. According to the authors, careful consideration of industry and market dynamics and how they affect event study model specification can play a critical role in an expert’s analysis in securities litigation.
The full article, “How ‘Spillover’ Effects Can Skew AI Securities Class Actions,” is available below.
