The paper "Driven to Distraction: Extraneous Events and Underreaction to Earnings News" by David Hirshleifer, Sonya Seongyeon Lim, and Siew Hong Teoh explores the hypothesis that investors' attention is divided, leading to underreaction to earnings news when distracted by other news events. The authors test this hypothesis by examining the impact of competing earnings announcements on the immediate and post-announcement reactions to a firm's earnings surprises. They find that the immediate stock price and volume reaction to a firm's earnings surprise is weaker, and post-earnings announcement drift is stronger, when there are more earnings announcements by other firms on the same day. The distraction effect is more pronounced for firms receiving positive earnings surprises and for industry-unrelated news. The study also suggests that trading strategies exploiting post-earnings announcement drift are unprofitable on days with little competing news. The findings support the investor distraction hypothesis, indicating that limited investor attention can affect market prices and investor behavior.The paper "Driven to Distraction: Extraneous Events and Underreaction to Earnings News" by David Hirshleifer, Sonya Seongyeon Lim, and Siew Hong Teoh explores the hypothesis that investors' attention is divided, leading to underreaction to earnings news when distracted by other news events. The authors test this hypothesis by examining the impact of competing earnings announcements on the immediate and post-announcement reactions to a firm's earnings surprises. They find that the immediate stock price and volume reaction to a firm's earnings surprise is weaker, and post-earnings announcement drift is stronger, when there are more earnings announcements by other firms on the same day. The distraction effect is more pronounced for firms receiving positive earnings surprises and for industry-unrelated news. The study also suggests that trading strategies exploiting post-earnings announcement drift are unprofitable on days with little competing news. The findings support the investor distraction hypothesis, indicating that limited investor attention can affect market prices and investor behavior.