کد مقاله کد نشریه سال انتشار مقاله انگلیسی نسخه تمام متن
884162 912377 2011 14 صفحه PDF دانلود رایگان
عنوان انگلیسی مقاله ISI
Do sell-side stock analysts exhibit escalation of commitment?
موضوعات مرتبط
علوم انسانی و اجتماعی اقتصاد، اقتصادسنجی و امور مالی اقتصاد و اقتصادسنجی
پیش نمایش صفحه اول مقاله
Do sell-side stock analysts exhibit escalation of commitment?
چکیده انگلیسی

This paper presents evidence that when an analyst makes an out-of-consensus forecast of a company's quarterly earnings that turns out to be incorrect, she escalates her commitment to maintaining an out-of-consensus view on the company. Relative to an analyst who was close to the consensus, the out-of-consensus analyst adjusts her forecasts for the current fiscal year's earnings less in the direction of the quarterly earnings surprise. On average, this type of updating behavior reduces forecasting accuracy, so it does not seem to reflect superior private information. Further empirical results suggest that analysts do not have financial incentives to stand by extreme stock calls in the face of contradictory evidence. Managerial and financial market implications are discussed.

Research highlights▶ We study analysts who make incorrect out-of-consensus forecasts of firm earnings. ▶ These analysts escalate their commitment to maintaining out-of-consensus views. ▶ On average, this type of updating behavior reduces forecasting accuracy. ▶ Analysts do not seem to have financial incentives to engage in this behavior.

ناشر
Database: Elsevier - ScienceDirect (ساینس دایرکت)
Journal: Journal of Economic Behavior & Organization - Volume 77, Issue 3, March 2011, Pages 304–317
نویسندگان
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