ORIGINAL ARTICLE The role of cognitive style, gullibility, and demographics on the use of social media for financial decision making Jenna Florendo 1 • Hooman Estelami 2 Ó Springer Nature Limited 2019 Abstract Consumer use of social media has witnessed significant growth in recent years. Due to its unregulated, user-generated, and poorly censored format, social media use has blurred the line between the fake and the true and can result in mass dissemination of inaccurate and false information, thereby impacting national politics, election outcomes, and social interactions between consumer social clusters. In the unique context of financial decisions, con- sumer reliance on social media can significantly increase the risk of making poor financial decisions. This study examined the impact of cognitive style, consumer gulli- bility, and demographics on consumers’ reliance on social media for financial decision making. The results of a US national survey identify consumer characteristics which contribute to increased reliance on social media in financial decision making. The findings point to consumer vulnera- bilities associated with psychographic and demographic attributes of consumers. The paper concludes with rec- ommendation-related consumer education and public pro- tection measures. Keywords Social media Á Information processing Á Financial decision making Introduction Consumer reliance on social media as an information source for decision making has been on a rise (Alsubagh 2015; Farshid et al. 2011; Murray et al. 2014). As a med- ium for information exchange, social media has grown in popularity due to its ease of use, the ability of users to generate content to interact with one another, and the abundance of accumulating information (Shao 2009; Voorveld et al. 2018). Social media use has been shown to have direct effects on American political views and resulting election outcomes (Williams 2017; Stier et al. 2018; Rossini et al. 2018). Recognizing the growing influence of social media, marketers have increased their emphasis on social media campaigns for the dissemination of product and brand information (Dootson et al. 2016; Voorveld et al. 2018). Due to its vast reach, social media use has blurred the line between reality and fiction, and the distinction between the truth and the fake, in political, business, economic, and social contexts. When the sources of information disseminated using social media are suspect, decision quality of individuals that utilize this information can be at great risk, as the provided information may lack accuracy or simply be false. In certain contexts, reliance on social media can have detrimental effects on decision outcomes of consumers. Concerns over the election processes in democracies around the world, stemming from suspect social media activities of rouge nations are one such example (Williams 2017). Election outcomes may not have direct and imme- diate impact on consumer welfare. However, consumers’ financial decisions which may be partially guided by social media information sources can be at risk, if the dissemi- nated information is ill-founded. Reliance on social media & Hooman Estelami estelami@fordham.edu Jenna Florendo jflorendo2@fordham.edu 1 Gabelli School of Business, Fordham University, 411 East Fordham Road, Bronx, NY 10458, USA 2 Gabelli School of Business, Fordham University, 400 Westchester Avenue, West Harrison, NY 10604, USA J Financ Serv Mark https://doi.org/10.1057/s41264-019-00064-7