NDLI: Confidence and trading aggressiveness of naïve investors: effects of information quantity and consistency

Content Provider	Springer Nature Link
Author	Smith, Steven D.
Copyright Year	2009
Abstract	Advances in technology, as well as regulatory and legislative actions, have led to an increase in the quantity of information available to the public. This paper experimentally examines the effects of information quantity and consistency (or directional agreement) on the judgments and trading behavior of naïve investors, holding constant the quality (or predictive value) of information. In my experiment, investors receive accounting signals and make predictions and trading decisions for 24 separate firms. I find that increasing the quantity and consistency of information leads naïve investors to show greater judgment confidence and trading aggressiveness. Increased quantity reduces investors’ expected wealth in laboratory markets, while the effect of consistency on expected wealth depends on the relationship between the low- and high-quality signals investors receive. Results highlight possible unintended consequences of increased disclosure and suggest directions for future experimental and archival research.
Starting Page	295
Ending Page	316
Page Count	22
File Format	PDF
ISSN	13806653
Journal	Review of Accounting Studies
Volume Number	15
Issue Number	2
e-ISSN	15737136
Language	English
Publisher	Springer US
Publisher Date	2009-06-13
Publisher Place	Boston
Access Restriction	One Nation One Subscription (ONOS)
Subject Keyword	Confidence Trading aggressiveness Naïve investors Information quantity Information consistency Finance /Banking Public Finance & Economics Accounting/Auditing
Content Type	Text
Resource Type	Article
Subject	Accounting

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1	Ministry of Education (GoI), Department of Higher Education	Sanctioning Authority	https://www.education.gov.in/ict-initiatives
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4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
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