Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/324642 
Year of Publication: 
2025
Series/Report no.: 
IWH Discussion Papers No. 13/2025
Publisher: 
Halle Institute for Economic Research (IWH), Halle (Saale)
Abstract: 
This paper examines the impact of complex yet precise language, particularly financial jargon, on information dissemination and ultimately market efficiency. As a natural laboratory, we analyze the information exchanged during earnings conference calls, where we instrument jargon with the Plain Writing Act of 2010. Our findings suggest that the Act's promotion of plain language usage results in a reduction in complex financial jargon for US firms. However, in contrast to the presumed benefits of accessible language, this reduction in jargon is associated with a decrease in market efficiency, implying that the Act may inadvertently hinder information flow. This finding is particularly important at the juncture where human-generated information is received by machines, which are known to be vunerable to ambiguous inputs.
Subjects: 
earnings conference calls
information asymmetry
jargon
market efficiency
Plain Writing Act
precise language
JEL: 
G00
G14
M40
M41
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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