Investor information search

Few will disagree that information search is essential in making investment decisions, a high-consequence decision task. Yet, the sources of investor information have never been used as a segmentation base to study investment behavior. We analyze survey results of investors in the US using informati...

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Bibliographic Details
Published in:Journal of economic psychology 2009-02, Vol.30 (1), p.24-41
Main Authors: Loibl, Cäzilia, Hira, Tahira K.
Format: Article
Language:English
Subjects:
Applied psychology
Biological and medical sciences
Cluster analysis
Earnings
Economic psychology
Economic theory
Fundamental and applied biological sciences. Psychology
Information
Information acquisition
Information search
Information search Investments Involvement
Information sources
Investment
Investment decision
Investments
Investors
Involvement
Miscellaneous
Psychological aspects
Psychology. Psychoanalysis. Psychiatry
Psychology. Psychophysiology
Studies
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Summary:Few will disagree that information search is essential in making investment decisions, a high-consequence decision task. Yet, the sources of investor information have never been used as a segmentation base to study investment behavior. We analyze survey results of investors in the US using information search, demographic, psychological, and involvement variables. Cluster analysis shows five typologies for investor information search based on sources of information. We also discover the majority of investors perform moderate- to low-information gathering strategies. The 11 demographics variables were insufficient to describe the typologies, although we did find higher-educated male investors with higher earnings more likely to practice a high-information search strategy, confirming previous studies. Turning to the psychological and involvement variables, we develop distinct typologies and identify several significant predictors for the five investor groups. For the majority of investors, investment decisions present a considerable and unwillingly undertaken challenge, and this study concludes with a discussion of how to target these investor typologies with approaches grounded in behavior-change theory.
ISSN:0167-4870
1872-7719
DOI:10.1016/j.joep.2008.07.009