Information flow and market efficiency : the economic impact of precise language / Andreas Barth, Sasan Mansouri, Fabian Wöbbeking ; editor: Halle Institute for Economic Research (IWH) - Member of the Leibniz Association
Loading...
Download960.1 KB
Information flow and market efficiency
Discovery
1933636904
URN
urn:nbn:de:gbv:3:2-123456789-1177757
DOI
ISBN
ISSN
Koordinaten
Skalierung
dc.contributor.contributor
Other contributor
Publication history
Halle (Saale), Germany : Halle Institute for Economic Research (IWH) - Member of the Leibniz Association, 2025
Content
1 Online-Ressource (III, 37 Seiten, 0,96 MB) : Diagramme
Edition
Language
eng
Comment
Literaturverzeichnis: Seite 19-22
Abstract
This paper examines the impact of complex yet precise language, particularly financial jargon, on information dissemination and ultimately market efficiency. As a natural laboratory, we analyze the information exchanged during earnings conference calls, where we instrument jargon with the Plain Writing Act of 2010. Our findings suggest that the Act‘s promotion of plain language usage results in a reduction in complex financial jargon for US firms. However, in contrast to the presumed benefits of accessible language, this reduction in jargon is associated with a decrease in market efficiency, implying that the Act may inadvertently hinder information flow. This finding is particularly important at the juncture where human-generated information is received by machines, which are known to be vunerable to ambiguous inputs.
Series
IWH discussion papers ; 2025, no. 13 (August 2025) ppn:837399270