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3816. Persuasive channel choices - evidence from manager-investor interactions
Invited abstract in session WD-59: OR in Accounting: Wealth and Risk, stream OR in Financial and Management Accounting.
Wednesday, 14:30-16:00Room: S08 (building: 101)
Authors (first author is the speaker)
| 1. | Anthony Haake
|
| Finance, RWTH Aachen | |
| 2. | Wolfgang Breuer
|
| RWTH Aachen | |
| 3. | Bertram Steininger
|
| KTH Royal Institute of Technology |
Abstract
This study develops and evaluates a linear optimization model for an optimal channel mix for persuasive communication. It is based on the premise that different disclosure channels induce different processing costs and that a listener's processing capacity for information is constrained. Under these conditions, a persuader benefits from distributing positive and negative information differently to maximize the listener's understanding of the positive and to minimize it for the negative information. By doing so, a persuader effectively increases her persuasive power. We show that our model predicts actual channel choices made by real-world persuaders in the setting of earnings announcements with an out-of-sample approach. Although our model only considers the information’s tone and readability, it predicts up to 69% of channel choices correctly, which is statistically significant. We provide robustness tests by assessing the sensitivity of the model’s predictive power to changes in numerical assumptions. Additional analysis indicates that persuasive channel choices are a selfish act, as these are predominantly done by firms with low ESG scores and high institutional ownership. A critical discussion of our results and an outlook for future research is provided.
Keywords
- Accounting
- Behavioural OR
- Group Decision Making and Negotiation
Status: accepted
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