Individual Traders and the Allocation of Scarce Attention

摘要: I consider a rational expectations model in which individual investors become informed by allocating limited attention to stocks. A single provides no measurable effects. However, individuals' equilibrium allocations are identical. Consequently, there exists an herd that crowds out institutions some Recent empirical work indicates traders informed, their actions measurable, and trades appear coordinated. My explains the data new cross sectional time series predictions regarding investor clienteles attentiveness. The challenges standard assumption of individuals subsumed institutions.