Images and investment: Experimental evidence on the effects of visual stimuli on financial decisions

We investigate the effect of emotional images on financial decision-making in an incentivized and pre-registered experiment. Utilizing a set of images rated on the emotional dimensions of valence and arousal from the Open Affective Standardized Image Set (OASIS) (Kurdi et al., 2017), we develop an experimental framework that can be easily applied to other contexts such as the use of images in corporate reporting. Further, we introduce a set of nature-related images which are pervasive in the advertisement of sustainable investment products. We show that negative images cause lower investments in risky mutual funds compared to neutral images, while positive images do not exhibit the opposite effect. Nature-related images do not cause investors to invest more than comparable non-nature images. Our results offer insights for financial regulators who are concerned with the impact of selective company disclosure and providers of financial products about the influence on emotional images on financial decisions.