The Effects of Ratings on Financial Decision-making
نویسنده
چکیده
How do investors evaluate financial products? We propose that investors' financial decisions are influenced by third-party information highlighted by product ratings or certifications. Particularly, we provide an experimental study to investigate the effects of ratings on financial decision-making. Results show that participants' product evaluations and risk perceptions differ if the investment product is framed by a positive versus negative versus no rating. Our findings also reveal that products are evaluated significantly higher for those with a positively framed rating and significantly lower for products with negatively framed rating compared to unrated products. Furthermore, risk perception is lower for the positively framed and higher for the negatively framed products. Additionally, we find that risk perception has a mediating effect on the relationship between ratings and product evaluations. Lastly, we demonstrate the moderating role of participants' expertise and susceptibility to informational influence on this relation. Due to the considerable impact of ratings on product evaluations, these findings have crucial implications for companies' marketing strategies as well as for regulatory authorities regarding assurance of quality ratings and rating provider methods
منابع مشابه
The Effects of the CEO’s Perceptual Bias in Economic Decision-Making and Judgment on the Capabilities of the Financial Reporting Quality
The current research sets out to identify and scrutinize the impact of the CEO’s perceptual biases in judgment and economic decision-making on the reporting quality of the firms listed on the Tehran Stock Exchange. Adopting a mixed method, the present study first seeks to detect the components and indices of CEO’s perceptual biases via critical appraisal and with the special participation of 10...
متن کاملRisk management in urban tunnels using methods of game theory and multi-criteria decision-making
In general, underground spaces are associated with high risks because of their high uncertainty in geotechnical environments. Since most accidents and incidents in these structures are often associated with uncertainty, the development of risk analysis and management methods and prevention of accidents are essential. A deeper recognition of the factors affecting the implementation process can p...
متن کاملStrategic financial decision making in comprehensive public universities
Experimental results and theoretical analysis confirms that financial strategic decisions due to the effect of the policy and organizational behavior is very important. The aim of this paper was to study financial strategic making decision and decision-making processes at University of Tehran. Data was collected through qualitative research methods. The population of the study was all the exper...
متن کاملThe Investigation on Effect of Negative News Frequency on decreasing in Ethical Behavior of Accountants
The purpose of this study was to investigate the effect of the publishing of negative financial news caused by financial scandals on the level of ethical decision making in the field of accounting and finance. The study was applied, follow-up and semi-experimental research. According to the research objectives, a semi-experimental research project has been used including two experimental and ...
متن کاملRole Taking Under Financial Risk Decision Making
This paper explores people’s behavior when they are facing financial risks. Through the setting of an economics experiment, people’s willingness to bear financial risks and their tendency to impose risks on others are investigated. The experiment result shows that most people are risk-neutral or risk-averse when making decision under financial environment, and their tendency to impose risks on ...
متن کامل