Nomen est omen? How and when company name fluency affects return expectations

• DOI: 10.1371/journal.pone.0287995
• Publication Date: 2023-08-16T17:41:06Z
• Authors: Achiel Fenneman; Dirk-Jan Janssen; Sven Nolte; Stefan Zeisberger
• Keywords: Affect; Processing fluency; Stock (firearms)

Investors perceive stocks of companies with fluent names as more profitable. This perception may result from two different channels: a direct, non-deliberate affect toward or deliberate interpretation signal for company quality. We use preregistered experiments to disentangle these channels and test their limitations. Our results indicate the existence significant fluency effect, while effect can be activated deactivated in boundary cases. Both effects are consistent across groups participants. However, whereas is strong isolation, it has limitations when investors confronted additional information about stock.