Animation shapes the way investors perceive stock prices



BUFFALO, NY – A stock looks riskier when its prices are presented in an animated line chart rather than a traditional static line chart, according to new research from the University of Buffalo School of Management.

Recently published in the Journal of Marketing Research, the study found that animated displays of time-varying data, such as stock or commodity prices, affect the decision-making of investors, consumers and managers by improving their perception of the risk induced by the data.

“Retail investors see how the prices of stocks in their portfolios change over time to judge their financial risk, and commodity trading managers form expectations of changes in the market based on price movements. over time, ”says Arun Lakshmanan, PhD, associate professor of marketing at the UB School of Management. “Animation focuses the viewer’s attention on specific characteristics, which leads them to draw more solid conclusions about risk. “

The researchers conducted a series of six studies to investigate the role of the animated display where changing data implied the likelihood of losing capital – one study in commodity trading and five in personal finance. The studies included lab, online, and field experiments that showed animations to be effective at different levels of industry expertise, experience, age, gender, and other demographics.

Lakshmanan urges retail investors to be cautious as more financial service providers like Plus500, Robinhood and Saxo Markets are using graphical dashboards with interactive visualizations.

“Modern data visualization tools are effective because their representations are intuitively perceptual,” he says. “But these tools can lead to biased portfolio management. In turn, this can cause non-professional investors to miss opportunities that could generate solid returns. On the other hand, animated display can also prevent them from making reckless investment decisions by moderating their feelings about risk.

Additionally, the researchers say their findings could have broader implications for visual information processing, data visualization, financial decision-making, and public policy.

“Animation is a subtle but powerful way of displaying data that can affect judgment,” explains Lakshmanan. “As our environment becomes increasingly saturated with information, our study shows that a more nuanced understanding of dynamic display forms, such as animation, is an interesting and practical area for future research. “

Lakshmanan collaborated on the study with Junghan Kim, assistant professor of marketing at Singapore Management University Lee Kong Chian School of Business.

The UB School of Management is recognized for the emphasis on real-world learning, community and economic impact, and the global perspective of its faculty, students and alumni. The school has also been ranked by Bloomberg Businessweek, Financial Times, Forbes, and US News & World Report for the quality of its programs and the return on investment it provides to its graduates. For more information on the UB School of Management, visit mgt.buffalo.edu.



Source link

Previous 'Mouseman' and 'Rabbitman' items to be auctioned off at Yorkshire Antique Furniture Sale
Next When is Luca ready? Pixar movie time frame explained