Abstract:

Many individuals now participate in online fund investment, but novice investors often struggle with the complex information they encounter due to the lack of professional guidance in traditional offline financing. Previous research on decision-making has primarily focused on outcomes and utilized statistical methods to construct decision models, which fail to provide direct evidence of information processing. To assist novices in developing the necessary skills for making investment decisions, this study employs process tracking technology in the field of fund investment for the first time. The aim is to explore the differences in information processing between experienced investors and novices, thereby identifying the advantages experienced investors possess in information processing. Additionally, this research investigates the relationship between the decision-making process and outcomes, proposing interventions based on information processing to aid novices in making accurate investment decisions.

To achieve the research objectives, two studies were conducted. Study 1 involved a comprehensive exploration that traced the fund investment decision-making process using Mouselab. It compared various information processing indicators between experienced investors and novices, including decision-making time, depth of search, variability of search, compensatory index, and SM (strategy measure) value of the search pattern. The study also examined the impact of the search pattern on decision quality for experienced investors and novices through grouping logistic regression. Study 1 revealed that: (1) Experienced investors, compared to novices, preferred to utilize attribute-based search pattern during fund investment decision-making (Experienced investors: n= 35, M= -5.48, SD= 4.34; Novices: n = 39, M= -2.88, SD= 5.67; t(72) = -2.20, p = 0.031, Cohen’s d = 0.51), and displayed a more non-compensatory approach to information processing (Experienced investors: M= 0.77, SD= 0.25; Novices: M= 0.88, SD= 0.19; t(72) = -2.15, p = 0.035, Cohen’s d = 0.50). (2) Only the decision quality of novices in fund investment was affected by the information search pattern (n = 37, B = -0.17, SE = 0.08, Wald χ²= 4.12, OR = 0.84, 95% CI = [0.72, 0.99], p = 0.042), indicating that their decision quality improved when they searched for information based on attributes. In contrast, the decision quality of experienced investors was unaffected by the information search pattern but positively influenced by working memory (n = 30, B = 0.16, SE= 0.08, Wald χ²= 4.15, OR = 1.18, 95% CI = [1.01, 1.38], p = 0.042).

Study 2 involved an intervention experiment utilizing a single-factor (structured intervention group vs. control group) between-subject design. Participants in the structured intervention group (n= 36) were provided a piece of form paper to guide them to structure information of funds, while participants in the control group (n= 37) were provided blank paper. Then all participants completed a simulated fund investment task and their decision quality was recorded. Study 2 demonstrated that participants who used form paper for intervention had higher decision-making quality (seventeen participants were correct) than those who used blank paper (nine participants were correct), χ² = 4.17, p = 0.041, φ = 0.24, indicating the effectiveness of the structured intervention.

This study makes theoretical and practical contributions to the literature. First, it explores the characteristics of the information processing process during fund investment decision-making and its relationship with decision outcomes, filling the research gap regarding the “process” of information processing and deepening the understanding of the essence of decision-making ability in fund investment. Second, it extends the "expert-novice" paradigm to the field of fund investment, summarizing the differences in the search pattern and compensatory behavior between experts and novices, further supporting the heuristic decision model. Third, it proposes effective interventions to assist novice investors in improving their online fund investment and inspires the interface design of fund applications.

Key words: fund investment decision, experienced investors, novices, information processing, intervention