Attention and Biases: Evidence from Tax-Inattentive Investors-Reference-Cited by-同舟云学术

Attention and Biases: Evidence from Tax-Inattentive Investors

Published:2023-12-07 Issue: Volume: Page:
ISSN:0025-1909
Container-title:Management Science
language:en
Short-container-title:Management Science

Author:

Birru Justin¹^ORCID,Chague Fernando²^ORCID,De-Losso Rodrigo³^ORCID,Giovannetti Bruno²^ORCID

Affiliation:

1. Fisher College of Business, The Ohio State University, Columbus, Ohio 43210;

2. Sao Paulo School of Economics, Fundação Getulio Vargas, São Paulo 01332-000, Brazil;

3. Department of Economics, University of Sao Paulo, Sao Paulo 05508-220, Brazil

Abstract

We first provide evidence of investor inattention to a very simple and well-known capital gains tax exemption in the Brazilian stock market. We then show that inattentive investors exhibit worse trading performance and stronger trading biases even after controlling for several investor-level variables, such as past trading experience. The evidence is consistent with inattention being one of the explanations for the prevalence of behavioral biases. This paper was accepted by David Sraer, finance. Funding: F. Chague and B. Giovannetti gratefully acknowledge financial support from Conselho Nacional de Desenvolvimento Científico e Tecnológico. Supplemental Material: The internet appendix and data are available at https://doi.org/10.1287/mnsc.2021.02516 .

Publisher

Institute for Operations Research and the Management Sciences (INFORMS)

Subject

Management Science and Operations Research,Strategy and Management

Link

https://pubsonline.informs.org/doi/pdf/10.1287/mnsc.2021.02516

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