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Financial Analysts and the False Consensus Effect

delete2013-05-03
delete12
PRE
AI
J
Jared Williams *
DOI：10.1111/1475-679X.12016delete
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Abstract

Abstract

En 中文
Social psychologists have documented a tendency for people to overestimate their similarity to others. I investigate whether financial analysts' forecast errors are consistent with this bias. I model the bias by assuming analysts overestimate the correlation of the private signals they receive about a firm's future earnings. Mymodel predicts a positive relationship between (i) the likelihood of an analyst's revised forecast being too close to his earlier forecast and (ii) the number of analysts issuing forecasts during the time interval between his two forecasts. I empirically confirm this prediction and consider several alternative explanations.
Keywords:
FORECAST REVISIONS
CAREER CONCERNS
PRICE
PERCEPTION
ACCURACY
MARKET
VOLUME

Journal

Journal of Accounting Research cover
Journal of Accounting Research
IF:
6.3
Papers:
1.7K
Citations:
1.3W

Organization

No organization information available