Complexity Aversion When Seeking Alpha

Abstract

A global field experiment with Seeking Alpha shows that textual complexity affects investor attention to news and market outcomes. Investors were randomly assigned different titles for the same news article. Holding the article fixed, a one-standard-deviation increase in complexity leads to 6.1% fewer views. Complexity is more off-putting for less-sophisticated investors, when attention is more limited, and when the news is likely less important. Exploiting an arbitrary rule for breaking ties between tested titles, I find that title complexity affects markets---lowering announcement turnover and volatility.

Keywords: Complexity, heuristics, investor attention

JEL Classification: G14, G41, D83, M41