Short and Synthetically Distort: Investor Reactions to Deepfake Financial News
Marc Eulerich · Universität Duisburg-Essen
Wed, May 28, 2025 · 14:00 UTC
Recent advances in artificial intelligence have led to new forms of misinformation, including highly realistic “deepfake” synthetic media. We conduct three experiments to investigate how and why retail investors react to deepfake financial news. Results from the first two experiments provide evidence that investors use a “realism heuristic,” responding more intensely to audio and video deepfakes as their perceptual realism increases. In the third experiment, we introduce an intervention to prompt analytical thinking, varying whether participants make analytical judgments about credibility or i