Processing Graphical Information: Perceptual Illusions of Risk and Return

Priya Raghubir, University of California, Berkeley
Sanjiv Das, University of Santa Clara
This paper examines how consumers process graphical information. Aspects examined include: digital versus graphical information (Studies 1 and 2); X-axis choices (Studies 3, 5, and 6), presence of reference indices (Studies 4, 5 and 6), and the salience of local maxima and minima (Studies 7-9). Results converge to a theory that consumers process visual graphical information by sampling salient data points to assess the trend and noise of a price series which biases estimates of risk and return. Theoretical implications for the processing of visual information, and practical implications for the communication of financial products and consumer welfare are discussed.
[ to cite ]:
Priya Raghubir and Sanjiv Das (2008) ,"Processing Graphical Information: Perceptual Illusions of Risk and Return", in NA - Advances in Consumer Research Volume 35, eds. Angela Y. Lee and Dilip Soman, Duluth, MN : Association for Consumer Research, Pages: 198-200.