Do investors see the darkness in narcissism?

We explore whether the impact of financial disclosures on investors' judgment and decision-making is contingent on their perception of CEOs' narcissism, in a setting in which firms report good news. Specifically, our theoretical model predicts that CEOs' narcissism impacts investors' willingness to invest through their perceptions of management credibility and disclosure credibility. Using data from 153 non-professional investors, we give support to those predictions. First, we find that investors' perception of management credibility is lower when a more narcissistic CEO leads the company. Second, our results indicate that this lack of credibility reduces investors' perception of disclosure credibility, which leads to a lower willingness to invest.