The role of information searches in investment choice variation: Digital information, advice seeking and heuristics

Purchasing risky investments can be a means to maximize individual wealth; but when faced with uncertainty about the investment outcome, individuals search for information on risk-reducing strategies. Most studies focus on digital information and advice-seeking information. This study extends the investigation of information search to discuss heuristics reliance, a simplified information search method. We also examine the effect of risk aversion on our extended information search model. The findings show that, individuals with more risk aversion tend to seek more information. More advice-seeking information search and heuristics reliance through a mass of digital information can increase investor's interest in mutual fund investments. The results demonstrate the value of enhancing the sophistication and accuracy of the information that a counselor provides, especially for investors who are risk averse. This study also has an implication for ethical issues.