First Impressions Matter: An Experimental Investigation of Online Financial Advice

Julie R. Agnew (), Hazel Bateman (), Christine Eckert (), Fedor Iskhakov, Jordan Louviere () and Susan Thorp
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Julie R. Agnew: Raymond A. Mason School of Business, College of William and Mary, Williamsburg, Virginia 23185
Hazel Bateman: UNSW Business School, UNSW Australia, Sydney NSW 2052, Australia
Christine Eckert: Business School, University of Technology Sydney, Ultimo NSW 2007, Australia
Jordan Louviere: School of Marketing, University of South Australia, Adelaide SA 5001, Australia

Management Science, 2018, vol. 64, issue 1, 288-307

Abstract: We explore how individuals assess the quality of financial advice they receive and how they form judgments about advisers. Using an incentivized discrete choice experiment, we show that first impressions matter: consumers more often follow advisers who dispense good advice before bad. We demonstrate how clients’ opinions of adviser quality can be manipulated by using an easily replicated confirmation strategy that depends on the quality of the advice and the difficulty and order of the advice topics. Our results also reveal how clients benefit from their own past experience and how they use professional credentials to guide their choices.

Keywords: economics; behavior and behavioral decision making; finance; investment (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:64:y:2018:i:1:p:288-307

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