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Red light, green light: Color priming in financial decisions

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  • Kliger, Doron
  • Gilad, Dalia

Abstract

Colors are widely present in the financial decision making arena: at firms’ and data providers’ websites; television reports; newspaper publications; advertizements; security market displays, with colors such as red and green prominently employed. Our experimental analysis involves a between subject design exposing subjects to financial substance on colored backgrounds and exploring the effect on their investment decisions. We focus on financial decisions under uncertainty about probability, examining subjects’ investment valuations and the probabilities they assign to the possible outcomes.

Suggested Citation

  • Kliger, Doron & Gilad, Dalia, 2012. "Red light, green light: Color priming in financial decisions," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(5), pages 738-745.
    • Handle: RePEc:eee:soceco:v:41:y:2012:i:5:p:738-745
    DOI: 10.1016/j.socec.2012.07.003
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Managing "Atmospherics" in Making Decisions
      by Rob Duboff in HBR Blog Network on 2013-11-06 22:00:54

    Citations

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    Cited by:

    1. Iris Gavish & Abraham Haim & Doron Kliger, 2021. "‘To LED or Not to LED?’: Using Color Priming for Influencing Consumers’ Preferences of Light Bulbs," Sustainability, MDPI, vol. 13(3), pages 1-12, January.
    2. William J. Bazley & Henrik Cronqvist & Milica Mormann, 2021. "Visual Finance: The Pervasive Effects of Red on Investor Behavior," Management Science, INFORMS, vol. 67(9), pages 5616-5641, September.
    3. Ma, Marshall Xiaoyin & Noussair, Charles N. & Renneboog, Luc, 2022. "Colors, Emotions, and the Auction Value of Paintings," European Economic Review, Elsevier, vol. 142(C).
    4. Ma, X., 2019. "Essays on alternative investments," Other publications TiSEM 7f4d5b36-96cb-4eac-ae91-f, Tilburg University, School of Economics and Management.
    5. Bosman, Ronald & Kräussl, Roman & Mirgorodskaya, Elizaveta, 2017. "Modifier words in the financial press and investor expectations," Journal of Economic Behavior & Organization, Elsevier, vol. 138(C), pages 85-98.
    6. Vanessa Mertins & Susanne Warning, 2013. "Gender Differences in Responsiveness to a Homo Economicus Prime in the Gift-Exchange Game," IAAEU Discussion Papers 201309, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    7. Cheema, Arbab K. & Eshraghi, Arman & Wang, Qingwei, 2023. "Macroeconomic news and price synchronicity," Journal of Empirical Finance, Elsevier, vol. 73(C), pages 390-412.
    8. Israel, Avi & Rosenboim, Mosi & Shavit, Tal, 2014. "Using priming manipulations to affect time preferences and risk aversion: An experimental study," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 53(C), pages 36-43.

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    More about this item

    Keywords

    Ambiguity; Choice under risk and uncertainty; Color; Decision making; Investment decisions; Priming effect;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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