To Correct or Not to Correct: Are Investors Able to Discern Fake Financial News?

Ning Du, Tawei Wang and Hui Lin

Journal of Behavioral Finance, 2025, vol. 26, issue 2, 172-186

Abstract: This study attempts to understand how to reduce the continued influence of misleading financial news and examine the effectiveness of corrective efforts such as ex-ante disclosure of compensation of a promoter/writer and the immediacy of ex-post correction. In the 2 (disclosure vs. no disclosure) × 2 (immediate correction vs. delayed correction) experiment, student participants received a (fake) news article including or excluding the author’s affiliation and compensation scheme and were then provided a correction invalidating its content. The correction was provided either immediately or with a delay. The results showed that although participants were susceptible to the influence of positive yet misleading news, providing warnings about potential economic conflicts of interest seemed to temper this enthusiasm among investors. Participants exhibited greater receptiveness to explicit corrections when the initial news article included a compensation disclosure, and when they were not immediately prompted to process the correction. Our findings imply that delaying corrections may offer distinct advantages, as it provides investors with the opportunity to assimilate the compensation disclosure information into their investment decisions over time. Additionally, our results indicate that a dual approach involving conflict of interest disclosure and subsequent correction can be an effective long-term strategy in mitigating investors’ vulnerability to misinformation.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/15427560.2023.2259031 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:hbhfxx:v:26:y:2025:i:2:p:172-186

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/hbhf20

DOI: 10.1080/15427560.2023.2259031

Access Statistics for this article

Journal of Behavioral Finance is currently edited by Brian Bruce

More articles in Journal of Behavioral Finance from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().