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Our first motivation is that patterns in attention are a window into information dependent utility. Karlsson, Loewenstein, and Seppi 2009 present a decision theoretic model of optimal attention for investors whose utility depends, in part, directly on information. Investors feel good when their portfolio increases in value and bad when its value drops, and attention amplifies case solution hedonic impact of information. As a result, investors make attention decisions in part case study manage their psychological exposure case study positive and negative information. Specifically, they are more likely case study log in case study check their account when past returns suggest that attention is likely case study reveal good news rather than bad news. This behavior leads case study a prediction called case solution ostrich effect:8Hypothesis 1: Investors holding equity pay more attention case study their investments in rising stock markets than in falling markets. Hypothesis 1: Investors holding equity pay more attention case study their investments in rising stock markets than in falling markets. An alternative is that bargain hunting could increase investor attention after negative returns. It is also possible that general curiosity and monitoring for potential trading opportunities can induce a U shaped relationship between attention and past returns after large price swings. 9 Monitoring for optimal tax loss harvesting in taxable accounts should lead case study case solution opposite login pattern from case solution ostrich effect. However, attention motivated by stock picking and stock specific attention grabbing should be absent in accounts invested in mutual funds rather than in individual stocks.
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