The Informational Role of Imagery in Financial Decision Making : A New Approach

What is the incremental information in imagery? This paper introduces the concept of visualattention and proposes a new methodology to identify the effect of information contentprovided in images, above and beyond that of contemporaneous textual information. Ourobjective (non-behavioral) approach introduces two sets of criteria for analyzing the effects ofimages - visual clarity and information content/reinforcement, which together inform individualinvestors in fi nancial decision making. This flexible methodology can be seamlessly integratedwith various modern information processing techniques, from simple keyword matchingto advanced semantic analysis or topic modeling. Applying our methodology to a hand collecteddata set of equity crowdfunding campaigns, we show that the existence of perceptibleimages is signi ficantly associated with greater investment, and that visual clarity measures arefound to incrementally affect investor decision making after controlling for textual sentimentand fi nancial information. Speci fically, more vibrant (intense) images with more focal pointsare associated with higher funding. Importantly, we find that the information reinforcingdichotomy we propose is a key determinant of (limited) visual attention: informationally additiveimages are those for which visual clarity measures are signi ficant, and those which seemto be associated with greater investor attention and investment. Finally, the methodology wedevelop in this paper provides the groundwork for a new framework within which to discuss(limited) attention, information, news, and investor reactions in today's digital and visual age