Decision Research at Warwick (DR@W)
This is a DR@W Event that takes place in the Library, Wolfson Research Exchange Area (Seminar Room 1). If you would like to attend, please contact Alexander Mushore (Alexander.Mushore@wbs.ac.uk)
Speaker Biography:
George Loewenstein a Professor of Economics and Psychology at Carnegie Mellon University and director of the Center for Behavioral Decision Research. He is a leader in the fields of behavioral economics and neuroeconomics.
George will presenting his paper "Financial Attention":
Recent theory posits, and empirical research supports, that individuals seek out, and in some situations avoid, information for psychological reasons. Using a novel panel data set on daily investor online logins for a large sample of 401(k) and other retirement accounts, we find strong support for selective attention to personal portfolio information that appears to be unrelated to trading-based motivations. In particular, the number of investors who login to their account falls by over 11% after market declines. This positive correlation between investor attention and market returns is consistent with a theory in which information directly affects investor utility. The attention/return correlation and the overall level of attention are also both strongly related to investor demographics (gender, age) and financial condition (wealth, portfolio holdings). Investors also pay less attention to their portfolios when news media attention to the stock market is low and when the VIX index for future stock volatility is high.