Visual representation and financial decision making

This thesis addresses experimentally three topics concerning the effects of visual representations on financial decision making. First, we hypothesize that visual representation of financial information affects comprehension and decision-making processes and outcomes. To test our hypothesis, we conducted online experiments demonstrating that the choice of visual representation leads to shifts in attention, comprehension, and evaluation of the information. The second study focuses on the ability of financial advisers to provide expert judgment to aid naïve consumers facing financial decisions. We found that advertising content significantly affects both experts and novices. Our results provide a previously underexplored viewpoint of decision making by finance professionals. The third topic concerns our ability to learn from multiple cues, adapt to changes, and develop new strategies. We investigated the effects of salient cues and environmental changes on learning, and found, among other things, that “abrupt” transformations in an environment are more harmful than “smooth” ones.