Repetition, Interactivity, and Investors’ Processing of Firm Disclosures

Recent regulatory amendments aimed at modernizing disclosures and enhancing their usefulness focus on repetition and interactivity within firms’ disclosure filings. We use an experiment to provide empirical evidence on the effects of disclosure repetition and interactivity on investors’ decision processes. Our results show that disclosure repetition (i.e., repeating of information within the filing) can be beneficial as it improves investors’ processing of the repeated information. For other, non-repetitive information within the filing, disclosure repetition has divergent effects on investors’ processing depending on disclosure interactivity (i.e., user involvement in directing the form or content of the information displayed). When disclosures are less interactive, repetition harms investors’ processing of non-repetitive information. This evidence corroborates concerns that repetition can obscure important information from investors. However, more interactive disclosures mitigate the harmful effects of repetition on investors’ processing of non-repetitive information. Thus, our evidence suggests that disclosure interactivity is an important presentation feature that can counteract some harmful effects of repetition.