Home | Business News | Browse by Publication | J | Journal of Information Systems

Discussion of impression management with graphs: effects on choices.

Article Excerpt
I. INTRODUCTION

Existing research into the role of graphical presentation of information for decision making focuses primarily on improving decisions. Arunachalam et al. (2002) turn the issue around and examine the question of whether decision makers' accuracy is affected by intentionally distorted graphs. While the answer to this question could certainly prove useful to those trying to influence decisions by using graphs, my principal concern deals with whether this question probes as deeply as it should. My comments on this paper are divided into three categories: comments dealing with the task, comments about the design and methods, and finally, a proposal for a more ambitious research question.

II. APPROPRIATENESS OF THE EXPERIMENTAL TASK

The subjects in this experiment were presented with a number of cases (the actual number differed across the three experiments) in which three companies were portrayed by four variables graphed with or without distortions. The subjects were asked to choose one of the three companies in which to invest. I question whether this task includes the essential variables for the investment decision. For example, the experiment does not mention the market value of these companies. An option would have been to tell the subjects that the three companies were of equal market value, which would have given the subjects a basis for selecting their preferred company. In addition, the four variables (sales, income, earnings per share, and dividends per share) presented were not sufficient to calculate any sort of risk or return measures. I think that omitting market value information as well as information that would have allowed some inference regarding the company's risk and return makes it difficult to understand what the subjects perceived the task to be. More importantly, it limits the ability to generalize the impact of distorted graphs in presenting financial information to actual investment tasks.

The use of student subjects also affects the generalizability of this study. While the authors refer to studies in which students were shown to be adequate surrogates for investors, their point does not go directly to the issue of whether they are good surrogates for financial statement users. I suspect that most of these subjects had never used financial statements...