Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/297620 
Year of Publication: 
2023
Citation: 
[Journal:] Contemporary Economics [ISSN:] 2300-8814 [Volume:] 17 [Issue:] 1 [Year:] 2023 [Pages:] 43-57
Publisher: 
University of Finance and Management in Warsaw, Faculty of Management and Finance, Warsaw
Abstract: 
This paper aims to investigate market participants' reactions to sequential information, presenting firm-specific news and market-wide information. Experimental study takes place in the COVID-19 pandemic era, as market-wide information representation. We also provide firm-specific information in the form of company fundamental information. The results show that participants, as representatives of retail investors, do not overreact to COVID-19. The recency effect dominates their decision-making. Neither firm-specific information nor market-wide information can eliminate the recency effect in decision making. Investors still provide valuations based on the latest information they receive. Another interesting finding in this study is that positive framing of information cannot mitigate the effects of bad news contained therein. Our findings contribute to the study of behavioral finance and corporate disclosure strategies. From the market participants' point of view, our results describe that investors' decisions are often not based on the information content but the latest information they received. From the company perspective, this research also contributes to the corporate disclosure strategy valued by investors based on how they disclose information to the public.
Subjects: 
COVID-19
sequential information
experiment
recency effect
market-wide information
firm-specific information
JEL: 
A12
G41
C91
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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