The Effect of Mobile Device Use and Headline Focus on Investor Judgments

41 Pages Posted: 5 Apr 2017 Last revised: 20 Nov 2019

See all articles by Tim Brown

Tim Brown

University of South Carolina - Department of Accounting

Stephanie M. Grant

University of Washington

Amanda Winn

University of Kansas

Date Written: November 14, 2019

Abstract

This study conducts two experiments to examine how investors’ judgments differ when they read a press release using either a mobile device or a computer. Results show that when investors use a mobile device, information related to a specific headline (mentioning a specific part of the news like “net income” or “revenue”) influences their investment judgments more than when investors use a computer. This effect is robust to specific headlines that focus on either positive or negative information. In contrast, investors’ judgments do not differ when they use a mobile device compared to a computer and the headline is general (using the broad term “results”). We replicate our findings in a second experiment and provide evidence that the observed effect occurs because investors who use their mobile device are in a more distracted frame of mind, which in turn increases the influence of prominent information. Our results suggest that managers’ presentation choices may have a greater influence on investors as they increasingly rely on mobile devices to research and execute investment decisions.

Keywords: Mobile Devices, Headline Focus, Investment Decisions, Distraction

JEL Classification: C91, D83, G11, M41

Suggested Citation

Brown, Tim and Grant, Stephanie M. and Winn, Amanda, The Effect of Mobile Device Use and Headline Focus on Investor Judgments (November 14, 2019). Accounting, Organizations and Society, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2946242 or http://dx.doi.org/10.2139/ssrn.2946242

Tim Brown

University of South Carolina - Department of Accounting ( email )

The Francis M. Hipp Building
1705 College Street
Columbia, SC 29208
United States

Stephanie M. Grant (Contact Author)

University of Washington ( email )

Box 353200
Seattle, WA 98195-3200
United States
(206) 543-2904 (Phone)

Amanda Winn

University of Kansas

1415
Lawrence, KS 66045
United States

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