| Non-sophisticated investors are the vital part of stock market(Elliott, Hodge,&Jackson2008), and doing research on their investment behavior is conducive to understand the function of capital market(Lucy Ackert.et al.1997).According to previous researches, non-professional investors refer to those individual investors, who invest their own money to buy stocks, while professional investors refer to those institutional investors, who are hired to invest for their clients, and the money they invest belongs to their clients. In Chinese stock market, the percentage of accounts of individual investors is99.7%; institutional investors,0.3%. These non-professional investors have limited investing-related knowledge, and are fond of prying so called inside information, yet have no channel to get them. Besides, due to their limited capability of prediction and analyzing, the non-professional investors always make judgments and decisions either by intuition or by following others. The "herd behavior","anchoring effect","negativity bias" and other irrational psychological phenomenon lead to irrational invest behavior, and then lead to the irrationality of the whole market. The500%annual turnover rate is the proof of the irrationality.Based on the large amount of Chinese non-professional investors and their own characteristics, by employing experimental method, this article is intending to explore the following questions:what kind of accounting information could be in favor of non-professional investors to make reasonable decisions? How do the non-professional investors interpret and utilize market rumors, and on what degree they depend on the rumors to make investment decisions? Could the improvement of the transparency of accounting information reduce the influence of market rumors and improve the efficiency of market?We choose full-time master students, majoring in accounting and finance, as the proxy for nonprofessional investors, and we design four experiments to investigate the questions we are interested in. The first is a pilot experiment, which aims at investigating whether the nonprofessional investors have different cognition of the rumors which come from different sources and makes preparation for the following experiments. The second experiment is a2×2between-subject experiment, which is used to explore the interaction of rumor’s source and rumor’s quality on the credibility that investors judge. The third is2×2×2between-subject experiment. This experiment is studying under good performance versus bad performance condition, how do the nonprofessional investors judge the credibility of rumors and how they make investment decision. The last one is also a2×2×2between-subject experiment, which is studying when accounting information is of good transparency versus bad transparency condition, how do the nonprofessional investors judge the credibility of rumors and how they make investment decision.This study achieved several findings by analyzing the experiment data. Firstly, nonprofessional investors have different preferences for different information source, and they deem that the more authoritative, the more credible. Secondly, on the influence of negative bias and scarce attention, when rumors come from authoritative source, the credibility is same, no matter good news or bad news; while when rumors come from unauthoritative source, the nonprofessional investors tend to believe bad news more. Thirdly, a company’s earnings performance could influence nonprofessional investors to judge rumors. Under good performance condition, nonprofessional investors believe bad news, and they would invest more if the performance is better. Fourthly, the improvement of transparency of accounting information could decrease the rumor’s credibility. The higher the transparency of accounting information, the lower the rumor’s credibility, and the credibility is not significantly different between good news and bad news. Yet, the lower the transparency of accounting information, the higher the credibility of bad news. The investment amount will increase with the increasing of transparency of accounting information. Finally, to a certain extent, the improvement of transparency of accounting information has a significant effect on curbing rumor-spreading behavior. In additionally, we find that the female is more vulnerable to rumors than their male count parts; and after acquiring the rumors, the female investors like to spread rumors by gossip, yet the male groups like to post on the internet. This study contributes to both academia and practice. First of all, the research on nonprofessional investors’ behavior is limited, the existing literatures mainly focus on investors’ mood, barely no other research is trying to study how do the nonprofessional investors interpret and utilize information. Our study initially attempt to investigate that how the earning performance and quality of accounting information would affect the nonprofessional investors to understand and use market rumors. Second of all, the existing two domestic papers on rumors only study the consequences of rumors, and only by employing event study. Besides, they just sort rumors by content. Our study initially sorts rumors by their sources, and firstly investigates the rumor problems by experiment method. Therefore we extend the domestic research on market rumors. Thirdly, this study re-examine the usefulness of accounting information from the angle of rumor, and also expand the research on disclosure of accounting information. Finally, this study provides some valuable references on improving the efficiency of nonprofessional investors’ investment, improving the quality of information disclosure of listed companies, and setting down legislations of investors’ protection. |
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