Who likes jargon? The joint effect of jargon type and industry knowledge on investors' judgments

• 成果类型: Article
• 署名作者: Tan, Hun-Tong; Wang, Elaine Ying; Yoo, G-Song
• 署名单位: Nanyang Technological University; University of Massachusetts System; University of Massachusetts Amherst; University of Sydney
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2019.03.001
• 发表日期: 2019
• 关键词: processing fluency; READABILITY; performance; complexity; difficulty; expertise

摘要

We experimentally investigate how jargon affects investment willingness for investors with different industry knowledge, and whether such effects vary with good or bad jargon. We find that for investors without industry knowledge, jargon decreases investment willingness because it decreases understanding. However, for investors with some but low industry knowledge, jargon increases investment willingness because it increases perceived product premium. Such effects exist whether good or bad jargon is used. Finally, investors with high industry knowledge differentiate between good and bad jargon, and reduce investment willingness only when bad jargon is used. These findings have implications for regulators, managers, and investors. (C) 2019 Elsevier B.V. All rights reserved.