News of Corporate Failure: Evaluating the Relationship Between Individual Assessments and Market Investments

Abstract

Individuals’ comprehension of communication is shaped by the use of metaphor. This study illustrates how the use of metaphor in business and economic news coverage shapes individuals’ responsibility attributions in ways that can ultimately influence consumers’ investment decisions. In a randomized experimental design, participants were invited to read news articles that described the bankruptcy of a business. The treatment text narrated the bankruptcy using metaphor, while the control text narrated the same event without the use of metaphor. After exposure to the communication text narrated with metaphor, responsibility attributions and subsequent investment decisions were significantly altered. The findings suggest that individual responsibility attributions, particularly when employed in connection with exposure to metaphorical loss frames, have the ability to influence individuals’ economic decisions. The theoretical importance and prospects for future communication studies are considered.