Investors Processing of Financial Communications: A Persuasion Perspective

Document Type

Article

Publication Date

7-1-2018

Publication Title

Behavioral Research in Accounting

Volume

31

Issue

1

First page number:

133

Last page number:

156

Abstract

In this paper, we provide a comprehensive summary of persuasion theories from a variety of fields (e.g., psychology, marketing, and economics) and describe how these theories can enhance our understanding of how investors process and respond to financial communications (e.g., firm disclosures and analyst research reports). We draw on dual-process theories of persuasion to describe the circumstances under which an investor's response to a financial disclosure is likely to represent the investor's intuition or reflect more deliberate and analytical processing of financial information. Examples from the financial accounting literature are used to illustrate how dual-process thinking and reasoning operate within a financial reporting domain. In addition, we offer broad suggestions on how financial accounting researchers can use the psychology of persuasion to understand and form empirical predictions about investor processing of and reaction to managers' and analysts' financial disclosures.

Keywords

Investor; Field variety; Persuasion theories; Financial communications; Dual process theories of persusion; Investor's response

Disciplines

Business | Finance and Financial Management

Language

English

UNLV article access

Search your library

Share

COinS