Finance and Financial Management Commons^™

Do Animated Line Graphs Increase Risk Inferences?, Junghan Kim, Arun Lakshmanan

Research Collection Lee Kong Chian School Of Business

This article shows that animated display of time-varying data (e.g., stock or commodity prices) enhances risk judgments. We outline a process whereby animated display enhances the visual salience of transitions in a trajectory (i.e., successive changes in data values), which leads to transitions being utilized more to form cognitive inferences about risk. In turn, this leads to inflated risk judgments. The studies reported in this article provide converging evidence via eye tracking (Study 1), serial mediation analyses (Studies 2 and 3), and experimental manipulations of transition salience (graph type; Study 3) and utilization of transitions (global trend; Study 4 and …