How fake news effects spread in an oligopolistic market — Evidence from the insulin market

• On 11 November 2022, a fake Twitter account declared that insulin would be free. • The paper focuses on spillovers to competitors using an event study approach. • Competitors experienced smaller and shorter negative effects than the targeted firm. • The pharmaceutical sector experienced shorter spillovers than insulin manufacturers. • No anticipation effects and no spread outside the American market were observed. This study analyzes the impact of an event on November 11, 2022, when a fake “certified” Twitter account falsely claimed that Eli Lilly's insulin would be provided for free. We examine spillover effects on competitors within the insulin market oligopoly. Our findings reveal that while competitors experienced short-term impacts, these were weaker and of shorter duration compared to Eli Lilly. Spillovers within the broader pharmaceutical sector were limited to the immediate aftermath. No anticipatory behavior was detected. The effects were confined to American stock exchanges, suggesting an absence of spillovers in European markets.