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Individual differences in susceptibility to financial bullshit

Author

Listed:
  • Kienzler, Mario
  • Västfjäll, Daniel
  • Tinghög, Gustav

Abstract

What is the effect of seemingly impressive verbal financial assertions that are presented as true and meaningful but are actually meaningless; that is, financial pseudo-profound bullshit? We develop and validate a novel measurement scale to assess consumers’ ability to detect and distinguish financial bullshit. We show that this financial bullshit scale captures a unique construct that is only moderately correlated with related constructs such as financial knowledge, numeracy, and cognitive reflection. Consumers particular vulnerable to financial bullshit are more likely to be young, male, have a higher income, and be overconfident with regards to their own financial knowledge. The ability to detect and distinguish financial bullshit also predicts financial well-being while being less predictive of consumers’ self-reported financial behavior, suggesting that susceptibility to financial bullshit is linked to affective rather than behavioral reactions. Our findings have implications for the understanding of how financial communication impacts consumer decision making and financial well-being.

Suggested Citation

  • Kienzler, Mario & Västfjäll, Daniel & Tinghög, Gustav, 2022. "Individual differences in susceptibility to financial bullshit," Journal of Behavioral and Experimental Finance, Elsevier, vol. 34(C).
    • Handle: RePEc:eee:beexfi:v:34:y:2022:i:c:s2214635022000193
    DOI: 10.1016/j.jbef.2022.100655
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    References listed on IDEAS

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    1. Brüggen, Elisabeth C. & Hogreve, Jens & Holmlund, Maria & Kabadayi, Sertan & Löfgren, Martin, 2017. "Financial well-being: A conceptualization and research agenda," Journal of Business Research, Elsevier, vol. 79(C), pages 228-237.
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    3. repec:cup:judgdm:v:14:y:2019:i:6:p:658-670 is not listed on IDEAS
    4. Strömbäck, Camilla & Skagerlund, Kenny & Västfjäll, Daniel & Tinghög, Gustav, 2020. "Subjective self-control but not objective measures of executive functions predicts financial behavior and well-being," Journal of Behavioral and Experimental Finance, Elsevier, vol. 27(C).
    5. Tinghög, Gustav & Ahmed, Ali & Barrafrem, Kinga & Lind, Thérèse & Skagerlund, Kenny & Västfjäll, Daniel, 2021. "Gender differences in financial literacy: The role of stereotype threat," Journal of Economic Behavior & Organization, Elsevier, vol. 192(C), pages 405-416.
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    7. Strömbäck, Camilla & Lind, Thérèse & Skagerlund, Kenny & Västfjäll, Daniel & Tinghög, Gustav, 2017. "Does self-control predict financial behavior and financial well-being?," Journal of Behavioral and Experimental Finance, Elsevier, vol. 14(C), pages 30-38.
    8. O'Connor, Genevieve E. & Newmeyer, Casey E. & Wong, Nancy Yee Ching & Bayuk, Julia B. & Cook, Laurel A. & Komarova, Yuliya & Loibl, Cazilla & Lin Ong, L. & Warmath, Dee, 2019. "Conceptualizing the multiple dimensions of consumer financial vulnerability," Journal of Business Research, Elsevier, vol. 100(C), pages 421-430.
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    Cited by:

    1. Barrafrem, Kinga & Västfjäll, Daniel & Tinghög, Gustav, 2024. "Financial Homo Ignorans: Development and validation of a scale to measure individual differences in financial information ignorance," Journal of Behavioral and Experimental Finance, Elsevier, vol. 42(C).
    2. Plotkina, Daria & Hoffmann, Arvid O.I. & Roger, Patrick & D’Hondt, Catherine, 2024. "Gender vs. personality: The role of masculinity in explaining cognitive style," LIDAM Reprints LFIN 2024010, Université catholique de Louvain, Louvain Finance (LFIN).

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    More about this item

    Keywords

    Bullshit; Financial bullshit; Financial behavior; Financial well-being; Scale;
    All these keywords.

    JEL classification:

    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • G53 - Financial Economics - - Household Finance - - - Financial Literacy

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