Visual Saliency and Investment Decisions
Published in Under Review, 2025
Abstract
Despite regulatory efforts to improve fee transparency, investors persistently underweight fees and overweight past performance. This study employs webcam-based eye-tracking technology in a large-scale online experiment to investigate how manipulating the visual saliency of fees shapes investment decisions.
Participants allocated $100 between pairs of equity funds differing in fees and historical returns, with treatments enhancing fee prominence through larger font sizes or strategic screen placement (top/left).
The findings show that increasing fee saliency reduces time-to-first-fixation on past performance graphs by 47-75% and significantly increases dwell time on fees by 3-5.8%.
These shifts in visual attention are associated with an 11.2% greater allocation to lower-fee funds in treatment groups compared to the control, with effects magnified for fund pairs exhibiting larger fee differentials.
Additional Information
Co-authors: Luca Enriques, Alfredo Desiato, Yoon-Ho Alex Lee, and Alessandro Romano
Methodology: Large-scale online experiment with webcam-based eye-tracking
Key Finding: 11.2% greater allocation to lower-fee funds when fee saliency is increased
Recommended citation: Kenneth Khoo, Luca Enriques, Alfredo Desiato, Yoon-Ho Alex Lee, and Alessandro Romano. "Visual Saliency and Investment Decisions." Available at SSRN: https://ssrn.com/abstract=5149911
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