The Effect of Mobile Device Use and Headline Focus on Investor Judgments
41 Pages Posted: 5 Apr 2017 Last revised: 20 Nov 2019
Date Written: November 14, 2019
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: Suggested Citation