Does more detailed information mean better performance? An experiment in information explicitness

Shang, Z., Brooks, C. ORCID: https://orcid.org/0000-0002-2668-1153 and McCloy, R. ORCID: https://orcid.org/0000-0003-2333-9640 (2014) Does more detailed information mean better performance? An experiment in information explicitness. Review of Behavioural Finance, 6 (2). pp. 86-103. ISSN 1940-5979 doi: 10.1108/RBF-10-2013-0036

Abstract/Summary

Purpose – Investors are now able to analyse more noise-free news to inform their trading decisions than ever before. Their expectation that more information means better performance is not supported by previous psychological experiments which argue that too much information actually impairs performance. The purpose of this paper is to examine whether the degree of information explicitness improves stock market performance. Design/methodology/approach – An experiment is conducted in a computer laboratory to examine a trading simulation manipulated from a real market-shock. Participants’ performance efficiency and effectiveness are measured separately. Findings – The results indicate that the explicitness of information neither improves nor impairs participants’ performance effectiveness from the perspectives of returns, share and cash positions, and trading volumes. However, participants’ performance efficiency is significantly affected by information explicitness. Originality/value – The novel approach and findings of this research add to the knowledge of the impact of information explicitness on the quality of decision making in a financial market environment.

Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/38398
Identification Number/DOI	10.1108/RBF-10-2013-0036
Refereed	Yes
Divisions	Henley Business School > Finance and Accounting Life Sciences > School of Psychology and Clinical Language Sciences > Department of Psychology
Uncontrolled Keywords	Individual investors, Experimental finance, Explicitness of information, Performance effectiveness, Performance efficiency
Publisher	Emerald
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