Abstract
With the advent of the "information age," investors are now faced with the challenges of the "mobile age," which has had a profound impact on the daily lives of people worldwide. Investors must process more information while experiencing increasing mobile phone-related distractions, particularly those generated by the fast-growing entertainment-type app industry. Attention is a limited cognitive resource that is vital for deliberate and thoughtful analysis. We analyzed data from an online peer-to-peer lending market to evaluate the impact of mobile distractions on investment performance. Our findings revealed that investors with a large number of mobile phone entertainment apps were more likely to exhibit higher default rates and lower investment returns. The results are robust, even when using exogenous internet service outage of the entertainment server and instrumental variables. We observed that the negative impact of distraction was more pronounced on Fridays and in regions with high-speed Internet access. A further examination of the mechanisms underlying this phenomenon revealed that investment decisions made while being distracted by mobile apps were influenced by information neglect and familiarity biases.