The role of cognitive style, gullibility, and demographics on the use of social media for financial decision making

Consumer use of social media has witnessed significant growth in recent years. Due to its unregulated, user-generated, and poorly censored format, social media use has blurred the line between the fake and the true and can result in mass dissemination of inaccurate and false information, thereby impacting national politics, election outcomes, and social interactions between consumer social clusters. In the unique context of financial decisions, consumer reliance on social media can significantly increase the risk of making poor financial decisions. This study examined the impact of cognitive style, consumer gullibility, and demographics on consumers’ reliance on social media for financial decision making. The results of a US national survey identify consumer characteristics which contribute to increased reliance on social media in financial decision making. The findings point to consumer vulnerabilities associated with psychographic and demographic attributes of consumers. The paper concludes with recommendation-related consumer education and public protection measures.