Attention and biases: Evidence from tax-inattentive

Justin Birru„, Fernando Chague…, Rodrigo De-LossoŸ, and Bruno Giovannetti
September 23, 2019

Abstract
We provide evidence of investor inattention to a very simple and well-known taxexemption opportunity in the Brazilian stock market. Attentive and inattentive investors are similar along the dimensions of portfolio size and number of trades, but inattentive investors exhibit stronger behavioral biases and worse trading performance. The results hold even among high-activity investors who trade large volumes. The results are consistent with inattention being a common cause of behavioral biases.