Can Subtle Wording Change an Investor’s Decision?

Summary

This study examines whether subtle differences in language, specifically “temporal immediacy” (how close in time events are described), affect investors’ decisions. For example, managers can describe positive future events as happening “soon” versus “later,” even if the underlying facts are the same. The study also tests whether the communication format (text vs. video/audio) changes how investors interpret this language. The research uses two controlled experiments with 252 MBA participants (proxy for informed investors) and analyzes real-world earnings call data (910 excerpts from S&P 500 firms).