First Impressions Matter: An Experimental Investigation of Online Financial Advice
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.
Data, as supplemental material, are available at https://doi.org/10.1287/mnsc.2016.2590.
This paper was accepted by John List, behavioral economics.
