The impact of order effects on nonprofessional investors' belief revision when presented a long series of disclosures in an experimental market setting

• Autores: Ronald J. Daigle, Robert Pinsker, Terence J. Pitre
• Localización: Accounting Horizons, ISSN-e 1558-7975, Vol. 29, Nº. 2, 2015, págs. 313-326
• Idioma: inglés
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• Resumen

  • Because firms are likely to release both good and bad news in close proximity to each other, it is important to understand what impact a long information set of mixed directional (i.e., both good and bad news) disclosures has on nonprofessional investors' stock price valuation decisions. Previous experimental research has identified information order effects as a critical factor impacting the decisions made by nonprofessional investors. However, the efficient market hypothesis predicts that individual biases are eliminated by the presence of market incentives, an element that is missing in prior studies on the effects of long information sets disclosures. Consequently, this study seeks to understand if and how order effects prevail in a market setting that includes economic incentives.