An International Meeting of the American Accounting Association American Accounting Association 2006 Annual Meeting August 6–9, 2006 Washington, D.C.

Nancy - Susan Jurney
University of Oklahoma

Abstract: While the SEC considered all market participants in mandating Reg FD, the regulation was designed to give individual investors the opportunity to get the same information at the same time as analysts and other investors. In order to understand how increased disclosures post-Reg FD influence individual investors’ judgments, I examined their reactions to types of information available pre- and post-Reg FD, using an experiment with MBA students and graduates as participants. I posited that price volatility during the time of information dissemination to the market would be higher post-Reg FD compared to pre-Reg FD. My study provides limited evidence that price volatility during the time of information dissemination is higher post-Reg FD, and complexity of the firm’s information appears to influence this higher price volatility. Confidence levels of individual investors were higher post-Reg FD, suggesting that providing more detailed information increases their confidence.

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