Banca de DEFESA: Rayane Farias dos Santos

Uma banca de DEFESA de DOUTORADO foi cadastrada pelo programa.
STUDENT : Rayane Farias dos Santos
DATE: 24/01/2025
TIME: 09:00
LOCAL: Plataforma Teams
TITLE:

ATTENTION ECONOMY AND FINANCIAL MARKET: The influence of attention on decision making, asset trading and investor sentimento

KEY WORDS:

Attention Economy. Behavioral Biases. Asset Trading. Investor Sentiment. Covid19.

PAGES: 126
BIG AREA: Ciências Sociais Aplicadas
AREA: Administração
SUBÁREA: Ciências Contábeis
SUMMARY:

This research analyzed the influence of limited attention on decision-making, asset trading behavior, and the sentiment of individual investors. To achieve this objective, three distinct studies were conducted. The first article examined the interaction between behavioral biases, stemming from limited attention, and the decision-making process of individual investors. The methodology included data collection through an electronic survey, which underwent three rigorous validation stages, with data analysis performed using ordinal logistic regression. The results indicated that biases such as overconfidence, availability heuristic, and representativeness bias, in addition to sociodemographic variables, significantly influence the decision-making process, highlighting the inherent complexity of investment choices. The second study investigated the impact of individual investor attention on trading volume and stock returns. The Search Volume Index (SVI) was used as a proxy to measure investors' attention, with the construction of a robust attention index, and the data were analyzed through quantile regressions, using the logarithm of abnormal trading volume and stock arithmetic returns as dependent variables. The findings revealed a significant positive correlation between investors' attention levels and trading volume across all models, showing that increased attention leads to proportional growth in transaction volume. This effect was particularly pronounced in companies that exhibited abnormal trading volumes. As for stock returns, the relationship with investor attention was both positive and negative, depending on the type of search conducted. The third study investigated the effect of attention directed to the Covid-19 pandemic on asset returns and individual investors' sentiment. The SVI was used as a proxy to measure investors' attention, while both simple and abnormal returns were employed as metrics for asset returns, and the Hedonometer Happiness Index served as a measure of investor sentiment. The analysis, conducted through quantile regressions, revealed that the attention directed toward the pandemic had a negative impact on investor sentiment and stock returns. This suggests that the increase in searches related to the pandemic raised perceived risk levels and uncertainty in the financial market, exacerbating the effects of limited attention during times of crisis. The thesis findings demonstrate that limited attention, by constraining investors' ability to process information effectively, intensifies behavioral biases that directly affect their decisions, resulting in excessive confidence in their skills and intuitions. Furthermore, limited attention reverberates in the financial market, influencing trading volume and asset returns in various ways. The relationship between attention and investor sentiment was also evident during periods of high uncertainty. By elucidating how limited attention affects decisionmaking, trading behavior, and investor sentiment, this research provides a foundation for developing interventions that could enhance financial market efficiency and mitigate the impact of impulsive and poorly grounded decisions.

COMMITTEE MEMBERS:
Presidente - 6404897 - CESAR AUGUSTO TIBURCIO SILVA
Interna - 388003 - FATIMA DE SOUZA FREIRE
Externo à Instituição - ALDO LEONARDO CUNHA CALLADO - UFPB
Externo à Instituição - DIOGO HENRIQUE SILVA DE LIMA - UFRN