Do Interfaces Matter? Investigating the Interaction of Information Acquisition Costs and Investor Sophistication

ABSTRACT

This study investigates how the SEC’s XBRL mandate affects investor information acquisition, particularly that of less sophisticated investors. Using evidence from SEC filing downloads, our results suggest that the XBRL standard increased all investors’ downloads and specifically those of less sophisticated investors by more than 1.5 times relative to more sophisticated investors. Additional evidence suggests that the increase in less sophisticated investors’ downloads is due, in part, to XBRL’s introduction of Interactive Viewer, a point-and-click tool on EDGAR that was slowly but disproportionately adopted by less sophisticated investors. Our results support the conclusion that XBRL helped equalize information accessibility. We find that, despite acquiring more information, less sophisticated investors did not consistently increase their trading, suggesting a complex relationship between information acquisition, information integration, and trade. This study contributes to the literature by demonstrating how accessibility influences information acquisition across investor types.

Data Availability: All data used in this study are publicly available.

JEL Classifications: M40; M41.