A test of the Behavioral versus the Rational model of Persuasion in Financial Advertising

We present a test of the behavioral versus the rational model of advertising in the financial market. We analyze the Granger-causality relationship existing between Comit stock market index and advertising of financial products and services from the most important daily published financial newspaper in Italy. We run the test for both the risky and non-risky advertising, finding that the behavioral model of advertising is supported when risky financial products and services are considered, while the rational model is true for the non-risky. We ascribe this result to the dual process of reasoning: When investors evaluate the decision to buy risky financial products and services, they activate the automatic, rapid decision making process. The behavioral model of advertising copes with it and provides an advertising strategy that responds to market evolutions. When non-risky financial products and services are considered, a different mental process, requiring slow and sequential reasoning, operates, compatibly with a rational decision making process.