Abstract

Information is often multidimensional, dynamic, and difficult to communicate using traditional representations such as verbal descriptions or even graphics. Taking a distributed cognition perspective and integrating several theories of visualization, this study formulates a theoretical model to examine the effects of information representation on a classic business decision-making task: bankruptcy prediction. The preliminary results from a laboratory experiment show that animated representations lead more accurate decisions than static graphs. The findings indicate that animation facilitates identification of the flows and problems in operating and financing processes, thereby improving subjects’ assessment of firm health.

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