Attention Utility: Evidence From Individual Investors

70 Pages Posted: 25 Feb 2020 Last revised: 11 Sep 2022

See all articles by Edika Quispe-Torreblanca

Edika Quispe-Torreblanca

University of Leeds Business School; University of Warwick - Warwick Business School; University of Oxford - Said Business School

John Gathergood

University of Nottingham - School of Economics

George Loewenstein

Carnegie Mellon University - Department of Social and Decision Sciences

Neil Stewart

Warwick Business School, University of Warwick

Multiple version iconThere are 2 versions of this paper

Date Written: September 10, 2022

Abstract

We introduce attention utility, the hedonic pleasure or pain derived purely from paying attention to information, and differs from the news utility that arises from gaining new information. Two studies document selective attention to good news. The first study examines brokerage account login data to show that investors pay disproportionate attention to already-known positive information on their stocks. Through its effect on logins, this selective attention affects their trading activity. A second experimental study shows that investors are more likely to engage in a paid task that will involve attention to a prior investment if that investment has gained value.

Keywords: information utility, attention, investor behavior

JEL Classification: G40, G41, D14

Suggested Citation

Quispe-Torreblanca, Edika and Gathergood, John and Loewenstein, George F. and Stewart, Neil, Attention Utility: Evidence From Individual Investors (September 10, 2022). Available at SSRN: https://ssrn.com/abstract=3527082 or http://dx.doi.org/10.2139/ssrn.3527082

Edika Quispe-Torreblanca (Contact Author)

University of Leeds Business School ( email )

United Kingdom

University of Warwick - Warwick Business School ( email )

Coventry CV4 7AL
United Kingdom

University of Oxford - Said Business School

Park End Street
Oxford, OX1 1HP
Great Britain

John Gathergood

University of Nottingham - School of Economics ( email )

Sir Clive Granger Building
University Park
Nottingham, NG7 2RD
United Kingdom

HOME PAGE: http://https://sites.google.com/site/gathergoodjohn/

George F. Loewenstein

Carnegie Mellon University - Department of Social and Decision Sciences ( email )

Pittsburgh, PA 15213-3890
United States
412-268-8787 (Phone)
412-268-6938 (Fax)

Neil Stewart

Warwick Business School, University of Warwick ( email )

Gibbet Hill Road
Coventry, West Midlands CV4 8UW
United Kingdom

HOME PAGE: http://www.stewart.warwick.ac.uk

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