The Role of Emotions in Investment Decisions: The Effects of Vividness of a Crowdfunding Campaign Video

Abstract

Current research in the domain of crowdfunding often overlooks the role of emotions in investment decision-making and the impact of varying vividness in campaign videos. Employing the Emotion-Imbued Choice Model (Lerner et al., 2015), this study investigates how different levels of a campaign video’s vividness shape emotions and the subsequent investment decision. Utilizing a quantitative approach with a between-group design, participants were exposed to either a campaign video, or an infographic accompanied by identical audio. Emotional reactions were analyzed via TAWNY, a deep learning tool for facial emotion recognition. Additionally, questionnaires assessed investment decisions, self-reported emotions, and evaluations of the stimulus. The findings suggest that emotions are likely to play an informative role throughout the decision-making process. Results show that the group receiving the infographic was more likely to invest, supporting the findings of Lagazio and Querci (2018). As posited by Dey et al. (2017), a crowdfunding video does not necessarily lead to higher crowdfunding chances. Notably, the mediating role of the conscious evaluation differs concerning idea and video evaluation, showing different effects on the relationship between current emotions and the outcome, that is, the investment decision and self-reported emotions. These findings align with the assumption of System 1 and System 2 thinking (Kahneman, 2011). Additionally, the lack of direct effects of current emotions on the outcome suggests the potential for a full mediation by the conscious evaluation, supporting modern decision-making theories (Lerner et al., 2015; Loewenstein et al., 2001).