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In the eyes of investors: the role of attention in nonprofessional investors’ reaction to earnings announcements

Author

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  • Amanda Badger
  • Siqi Li
  • Savannah Wei Shi

Abstract

Utilising eye-tracking technology to directly measure visual attention, we conduct an experiment to examine whether placing specific and quantitative information that summarises the earnings news (“key financial information”) in the headline section of an earnings release affects nonprofessional investors’ information processing and valuation judgements. We develop multiple attention measures: dwell time, revisits, and recency of last visit, to capture the depth of information processing effort and the spatial and temporal dynamics of the attention distribution. Our experiment reveals that when the earnings release conveys good news, headlining key financial information not only leads investors to pay greater attention to the headline section, but also primes them to devote more attention to a subsequent section that contains financial details. We also predict and find some evidence that investors’ attention to the headline section mediates the effect of headlining key financial information on their valuation judgements when earnings news is good. Taken together, our study provides new insights into the black box of investor attention and information processing when reading earnings releases.

Suggested Citation

  • Amanda Badger & Siqi Li & Savannah Wei Shi, 2026. "In the eyes of investors: the role of attention in nonprofessional investors’ reaction to earnings announcements," Accounting Forum, Taylor & Francis Journals, vol. 50(2), pages 298-330, March.
    • Handle: RePEc:taf:accfor:v:50:y:2026:i:2:p:298-330
    DOI: 10.1080/01559982.2025.2488905
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