When and How Do Advertisements Affect Investors’ Processing of Online Financial Information?
42 Pages Posted: 22 Mar 2021 Last revised: 13 Jan 2024
Date Written: December 15, 2023
Abstract
We investigate when and how unrelated, proximate content affects investors’ processing of financial information in an online environment. Specifically, we develop a theoretical model and conduct a series of experiments that examine the effects of different types of advertisements on investors’ processing of nearby financial information. Our results suggest that neutral product advertisements located in the periphery of a webpage generally do not affect investors’ attention or mood and thus do not affect their processing of nearby financial information. Eye tracking data suggest a reason: investors largely avoid looking at these types of ads. However, we find that investors are not able to ignore all types of unrelated, proximate content. Advertisements with negative content that intrude upon the primary financial information affect recall of that information, generate negative investor mood, and change investors’ perceptions of nearby financial information. These effects, in turn, change investors’ willingness to invest. Our results suggest that users of online financial information would benefit from ad-blocking software and using sources with fewer ads and links to peripheral content.
Keywords: investor behavior, online financial information, advertisements
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