How “Point Blindness” Dilutes the Value of Stock Market Reports
AbstractThe stock index “point” is a focal component of financial news reports. While much attention is paid to changes in stock index point totals, few people realize that the value of a stock index “point” varies (and has recently declined). We call this perceptual phenomenon “point blindness” and explain its threat to investors. Simple changes in media presentations of stock index information can counter point blindness. These changes are easy to implement and can help audiences make better financial decisions. An experiment on over 2000 participants shows such changes significantly altering their perceptions of the stock market.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 9612.
Date of creation: 17 Jul 2008
Date of revision:
behavioral economics: personal finance; communication;
Other versions of this item:
- Lupia, Arthur & Grafstrom, Cassandra & Krupnikov, Yanna & Levine, Adam Seth & MacMillan, William & McGovern, Erin, 2008. "How “Point Blindness” Dilutes the Value of Stock Market Reports," MPRA Paper 8191, University Library of Munich, Germany.
- Lupia, Arthur & Krupnikov, Yanna & Levine, Adam Seth & Grafstrom, Cassandra & MacMillan, William & McGovern, Erin, 2008. "How “Point Blindness” Dilutes the Value of Stock Market Reports," MPRA Paper 9604, University Library of Munich, Germany.
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
- C99 - Mathematical and Quantitative Methods - - Design of Experiments - - - Other
- D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-07-30 (All new papers)
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