Attention Allocation Mechanism Research Articles

Economic policy uncertainty, investor attention and post-earnings announcement drift

How the market incorporates information into stock price is a core issue in finance. This study focuses on the impact of economic policy uncertainty (EPU) on the stock prices information efficiency of China's A-share market and underlying role of investors' attention allocation mechanism. This study analyzes the information efficiency of stock prices using the sensitivity of stock cumulative abnormal return to earnings information across different windows following earnings announcement. Based on the earnings announcement events of listed companies in China's A-share market, this study presents an empirical study of the aforementioned issues using event study and regression analysis methods. The following results are seen: (1) EPU aggravates the underreaction of stock price earnings information and the post-earnings announcement drift in the A-share market. (2) Under highly uncertain economic policies, investors show a limited attention allocation pattern of devoting increasing attention to macroeconomic policies and decreasing attention to earnings information, which leads to a decrease in the information efficiency of stock price. This study also analyzes the heterogeneity of the influence of EPU on stock price information efficiency using the institutional shareholding ratio. The results show that increasing institutional shareholding does not reduce the adverse effects of EPU on the information efficiency of stock prices. This study not only provides empirical evidence for Brunnermeier, Sockin, and Xiong (2022) and rational inattention theory, but also reveals that institutional investors show similar behavioral characteristics to retail investors in China's stock market. The results of this study have policy significance for improving the information efficiency of stock market.

Pupil-Linked Arousal Response Reveals Aberrant Attention Regulation among Children with Autism Spectrum Disorder.

Autism spectrum disorder (ASD) is a developmental disorder that is characterized by difficulties with social interaction and interpersonal communication. It has been argued that abnormal attentional function to exogenous stimuli precedes and contributes to the core ASD symptoms. Notably, the locus ceruleus (LC) and its noradrenergic projections throughout the brain modulate attentional function, but the extent to which this locus ceruleus-norepinephrine (LC-NE) system influences attention in individuals with ASD, who frequently exhibit dysregulated alerting and attention orienting, is unknown. We examined dynamic attention control in girls and boys with ASD at rest using the pupil dilation response (PDR) as a noninvasive measure of LC-NE activity. When gender- and age-matched neurotypical participants were passively exposed to an auditory stream, their PDR decreased for recurrent stimuli but remained sensitive to surprising deviant stimuli. In contrast, children with ASD showed less habituation to recurrent stimuli as well as a diminished phasic response to deviants, particularly those containing social information. Their tonic habituation impairment predicts their phasic orienting impairment, and both impairments correlated with the severity of ASD symptom. Because of the fact that these pupil-linked responses are observed when individuals passively listen without any task engagement, our findings imply that the intricate and dynamic attention allocation mechanism, mediated by the subcortical LC-NE system, is impaired in ASD.SIGNIFICANCE STATEMENT Autistic individuals show attentional abnormalities to even simple sensory inputs, which emerge even before formal diagnosis. One possible mechanism behind these abnormalities is a malfunctioning pacemaker of their attention system, the locus ceruleus-norepinephrine pathway. Here we found, according to the pupillary response (a noradrenergic activity proxy), autistic children are hypersensitive to repeated sounds but hyposensitive to surprising deviant sounds when compared with age-matched controls. Importantly, hypersensitivity to repetitions predicts hyposensitivity to deviant sounds, and both abnormalities positively correlate to the severity of autistic symptoms. This provides strong evidence that autistic children have faulty noradrenergic regulation, which might underly the attentional atypicalities previously evidenced in various cortical responses in autistic individuals.

Framing context effects with reference points

Research on reference points highlights how alternatives outside the choice set can alter the perceived value of available alternatives, arguably framing the choice scenario. The present work utilizes reference points to study the effects of framing in preferential choice, using the similarity and attraction context effects as performance measures. We specifically test the predictions of Multialternative Decision by Sampling (MDbS; Noguchi & Stewart, 2018), a recent preferential choice model that can account for both reference points and context effects. In Experiment 1, consistent with predictions by MDbS, we find a standard similarity effect when no reference point is given that increases when both dimensions are framed negatively and decreases when both dimensions are framed positively. Contrary to predictions by MDbS, when the two dimensions are framed as tradeoffs, participants prefer whichever alternative performs best in the negatively framed dimension. Performance of MDbS was improved by the addition of a frame-based global attention allocation mechanism. Experiment 2 extends these results to a “by-dimension” presentation format in an attempt to bring participant behavior in line with MDbS assumptions. The empirical and modeling results replicated those of Experiment 1. Experiment 3 used the attraction effect to test the effects of framing when the best-performing alternative on each dimension was identical across target conditions, therefore reducing the potential effects of a global attention allocation mechanism. The effects of framing were indeed greatly reduced, and the performance of MDbS was markedly improved. The results extend framing to the context effects literature, provide new benchmarks for models and theories of context effects, and point to the need for a global attention mechanism.

Attention Allocation to Financial Information: The Role of Color and Impulsivity Personality Trait.

BackgroundIn order to raise the level of investor’s protection, the European Commission has recently introduced the key investor information document (KIID), a standard, plainly worded, and consumer-friendly document which should provide individuals with essential information for their investment decisions. KIID layout has been delineated relying on results from focus groups, surveys and telephone interviews, ignoring the reliable, and unbiased insights offered by neuroscientific approaches.AimThe current study aims to elucidate the patterns of eye movements in the early phases of information acquisition during the reading of financial disclosure documents, disentangling the independent role of color and impulsivity at modulating attention distribution toward the different sources of financial information.Materials and MethodsOculomotor behavior was monitored in eighty-one healthy adults through the eye tracking technology (SMI REDn Scientific 60 Hz). An ecological protocol exploiting KIIDs was developed to control for several individual variables, through delivering standard visual stimuli based on official financial documents. Participants performed a passive exploration task (with the only specific instruction of visually exploring the document), followed by an active task where they were asked to rate the financial attractiveness of the products, as low, medium or high. The Barratt impulsiveness scale (BIS-11) was administered to each participant, to score such personality trait.ResultsAttention distribution over the different information sources, included in the KIIDs, has been quantified and found to be independently modulated by both color and impulsivity, with a greater role of the former over the latter. The addition of either red or blue information to some KIID’s sections increases attention allocation toward the whole document, compared to the usual black and white version. BIS-11 total scores were inversely related to the first and average fixation duration in the neutral, though not in the colored condition.DiscussionBottom-up, stimulus-related mechanisms of attention allocation influence information acquisition during the reading of financial prospectuses to the point that the increased attention induced by color compensates for individual impulsivity. Such evidence should be considered by regulators when devising the disclosure documents in order to increase investors’ protection.

Supervisors' Visual Attention Allocation Modeling Using Hybrid Entropy.

With the improvement in automation technology, humans have now become supervisors of the complicated control systems that monitor the informative human–machine interface. Analyzing the visual attention allocation behaviors of supervisors is essential for the design and evaluation of the interface. Supervisors tend to pay attention to visual sections with information with more fuzziness, which makes themselves have a higher mental entropy. Supervisors tend to focus on the important information in the interface. In this paper, the fuzziness tendency is described by the probability of correct evaluation of the visual sections using hybrid entropy. The importance tendency is defined by the proposed value priority function. The function is based on the definition of the amount of information using the membership degrees of the importance. By combining these two cognitive tendencies, the informative top-down visual attention allocation mechanism was revealed, and the supervisors’ visual attention allocation model was built. The Building Automatic System (BAS) was used to monitor the environmental equipment in a subway, which is a typical informative human–machine interface. An experiment using the BAS simulator was conducted to verify the model. The results showed that the supervisor’s attention behavior was in good agreement with the proposed model. The effectiveness and comparison with the current models were also discussed. The proposed attention allocation model is effective and reasonable, which is promising for use in behavior analysis, cognitive optimization, and industrial design.

Tracking Economic Value of Products in Natural Settings: A Wireless EEG Study.

Economic decision making refers to the process of individuals translating their preference into subjective value (SV). Little is known about the dynamics of the neural processes that underpin this form of value-based decision making and no studies have investigated these processes outside of controlled laboratory settings. The current study investigated the spatio-temporal dynamics that accompany economic valuation of products using mobile electroencephalography (EEG) and eye tracking techniques. Participants viewed and rated images of household products in a gallery setting while EEG and eye tracking data were collected wirelessly. A Becker-DeGroot-Marschak (BDM) auction task was subsequently used to quantify the individual’s willingness to pay (WTP) for each product. WTP was used to classify products into low, low medium, high medium and high economic value conditions. Eye movement related potentials (EMRP) were examined, and independent component analysis (ICA) was used to separate sources of activity from grand averaged EEG data. Four independent components (ICs) of EMRPs were modulated by WTP (i.e., SV) in the latency range of 150–250 ms. Of the four value-sensitive ICs, one IC displayed enhanced amplitude for all value conditions excluding low value, and another IC presented enhanced amplitude for low value products only. The remaining two value-sensitive ICs resolved inter-mediate levels of SV. Our study quantified, for the first time, the neural processes involved in economic value based decisions in a natural setting. Results suggest that multiple spatio-temporal brain activation patterns mediate the attention and aversion of products which could reflect an early valuation system. The EMRP parietal P200 component could reflect an attention allocation mechanism that separates the lowest-value products (IC7) from products of all other value (IC4), suggesting that low-value items are categorized early on as being aversive. While none of the ICs showed linear amplitude changes that parallel SV’s of products, results suggest that a combination of multiple components may sub-serve a fine-grained resolution of the SV of products.

The Allocation of Attention in Change Detection and Change Blindness

Abstract. Visual change detection often fails when observers’ attention is distracted by some other visual disruptions in the environment that occur simultaneously with the change. This phenomenon is called change blindness. It has been claimed that selective attention is necessary for successful change detection. In the current experiment, two mechanisms of attention allocation in such a task were investigated. First, the number of distracting stimuli was varied to distract observers’ attention and, second, possible change positions were highlighted to allow observers to better focus on potential change locations. The N2pc component of the event-related potential was measured as an indicator of attentional selection. The results show that the sensitivity for changes increased either when observers were less distracted or when they were able to better focus their attention. However, these two mechanisms were reflected differently by the N2pc component. When observers’ attention was less distracted by a lower number of mudsplashes, the N2pc component occurred earlier. In contrast, when observers were able to better focus their attention on potential change locations, the N2pc component not only occurred earlier but also showed an additional enhancement in amplitude. That is, successful change detection depends on both, the properties of distracting and of changing objects. They determine the speed and intensity of the allocation of attention toward a change.

Neural evidence for enhanced attention to mistakes among school-aged children with a growth mindset

Individuals who believe intelligence is malleable (a growth mindset) are better able to bounce back from failures than those who believe intelligence is immutable. Event-related potential (ERP) studies among adults suggest this resilience is related to increased attention allocation to errors. Whether this mechanism is present among young children remains unknown, however. We therefore evaluated error-monitoring ERPs among 123 school-aged children while they completed a child-friendly go/no-go task. As expected, higher attention allocation to errors (indexed by larger error positivity, Pe) predicted higher post-error accuracy. Moreover, replicating adult work, growth mindset was related to greater attention to mistakes (larger Pe) and higher post-error accuracy. Exploratory moderation analyses revealed that growth mindset increased post-error accuracy for children who did not attend to their errors. Together, these results demonstrate the combined role of growth mindset and neural mechanisms of attention allocation in bouncing back after failure among young children.

Impaired processing of task-irrelevant salient information in adults with attention-deficit/hyperactivity disorder: Evidence from event-related potentials.

The current study examined the mechanisms of attention allocation in adult ADHD to investigate the frequently reported diminished target processing in ADHD as well as the less consistently observed increased distractibility by task-irrelevant distracting stimuli. To this end, while high-density EEG was recorded, 25 adults with ADHD and 23 healthy controls completed a 4-stimulus oddball task that comprised a frequently presented standard stimulus and 3 different categories of equally infrequent stimuli: task-relevant targets, task-irrelevant nontargets, and task-irrelevant unfamiliar novels. By applying specific contrasts, this allowed us to disentangle pure effects of 3 kinds of salience, namely targetness (targets vs. nontargets), deviance (nontargets vs. standards), and novelty (novels vs. nontargets). Distinct effects of targetness, deviance and novelty across several components were found. At the behavioral level, no group differences between adults with and without ADHD were observed. Contrary to our expectations, no difference between groups was found for the P3b amplitude to targets or the novelty P3 to nontargets and novels; however, in adults with ADHD a clear P3b to novels was apparent, which was absent in controls. This latter finding indicates deficient attention allocation in adults with ADHD, more specifically increased sustained processing of task-irrelevant novel events. (PsycINFO Database Record

Attention Decay and Attention Renewal Effect under Choice-Overloaded E-Commerce Environment

There are some differences between online and offline shopping. From the consumer perspective, in the online shopping, the searching cost is much lower and it is easy to find the item that has not been known before because of the recommendation system. From the seller perspective, the marginal cost of displaying additional product is extremely decreasing. These factors enable online sellers to provide much more alternatives than offline. In contrast to this phenomenon, it is also possible to offer just a single option. In the online, the customer base is not limited by the location. This research is trying to find the consumer behavior under these various alternatives conditions. In the research, we investigated the consumer attention allocation mechanism in the online shopping through the eye-tracking device. Based on this research, consumers selected the limited number of alternatives that they gave their attention and the location was the main factor that determines the attention allocation mechanism. The top position (when the alternatives are listed vertically) and the left-centerfield position (when the alternatives are listed horizontally) are better than any other locations to get more attention from consumers. Attention decays as far from this position exponentially. We called this phenomenon as ‘attention decay effect’. Also, even though the alternative format and product is exactly same as before, just categorization could increase the total attention from consumers. We called this phenomenon as ‘attention renewal effect’. These results could be applied to the product displaying strategy in the online shopping and advertisement pricing strategy.

Pilot attention allocation model based on fuzzy theory

Quantitative research into a pilot’s attention allocation mechanism is required in the optimization design of an aircraft human–machine interface and system evaluation. After making a comprehensive consideration of several factors, including the importance of information, information detective efficiency and human errors, a pilot attention allocation model was built on the basis of hybrid entropy. In order to make a verification of the pilot attention allocation model, a simulation model of a head-up display (HUD) used to present flight indicators was developed. After setting the membership degrees of the importance for different indicators according to their priorities, the experiments on the key-press response and eye-movement tracking were designed and carried out under the cruise and hold modes. As the experiment results are in good agreement with the theoretical model, the effectiveness of the pilot attention allocation model based on fuzzy theory is confirmed.

Using an Event-Detection Measure to Assess Drivers' Attention and Situation Awareness

In this paper we describe an event-detection measure for assessing drivers' attention and situation awareness during driving, and present data from a study using this measure. In this study, drivers detected traffic events directly in front of them most frequently, events in an oncoming front lane less frequently, and events behind them least often. Drivers also detected swerve events more frequently than deceleration events. We compare the event-detection measure to other measures of attention and situation awareness used to assess driving: the SAGAT technique (Endsley, 1995), implicit-performance measures (Durso & Gronlund, 1999), and the flicker paradigm (Richard, Wright & Ee, 2002). Each of the above measures has advantages and disadvantages, and no single measure is optimal. However, we argue that the eventdetection measure has some advantages over other techniques in answering questions regarding mechanisms of attention allocation and attention capture and how these two mechanisms interact during driving.

An Investigation of Attention Allocation Deficits in Aphasia

Nine aphasic and 18 normal adults participated in a dual task with components of phoneme monitoring and semantic judgment. Subjects listened to lists of recorded spoken words and were required to detect semantic and phonetic targets. Two within-subject variables were manipulated: the probability of target occurrence for each dual-task component (.2, .5, and .8) and the explicitness of instruction (explicit vs. implicit). Only in the explicit condition were subjects told about the probability structure and given the attention allocation strategy congruent with that structure. Reaction times were recorded on-line for analysis by an IBM-AT. The results showed that normal subjects′ overall latencies in detecting phonetic targets decreased as the target occurrence probability increased in both implicit and explicit instruction conditions. The detection latencies for semantic targets showed a similar probability effect but only in the explicit condition. By contrast, the aphasic subjects did not show the probability effect in any condition, although they performed above the chance level on both semantic and phonetic tasks. The presence of the probability effects for the normal subjects indicated that an efficient attention allocation mechanism was operating so as to optimize the performance level. On the other hand, the absence of probability effects for the aphasic subjects suggests that their attention control system might be inefficient so that task-demand cues (probability and attention allocation instruction) were not utilized properly.