Analysts' weighting of private and public information
Publication
, Journal Article
Chen, Q; Jiang, W
Published in: Review of Financial Studies
January 1, 2006
Using both a linear regression method and a probability-based method, we find that on average, analysts place larger than efficient weights on (i.e., they overweight) their private information when they forecast corporate earnings. We also find that analysts overweight more when issuing forecasts more favorable than the consensus, and overweight less, and may even underweight, private information when issuing forecasts less favorable than the consensus. Further, the deviation from efficient weighting increases when the benefits from doing so are high or when the costs of doing so are low. These results suggest that analysts' incentives play a larger role in misweighting than their behavioral biases.
Duke Scholars
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Published In
Review of Financial Studies
DOI
EISSN
1465-7368
ISSN
0893-9454
Publication Date
January 1, 2006
Volume
19
Issue
1
Start / End Page
319 / 355
Related Subject Headings
- Finance
- 3801 Applied economics
- 3502 Banking, finance and investment
- 1502 Banking, Finance and Investment
- 1402 Applied Economics
- 1401 Economic Theory
Citation
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MLA
NLM
Chen, Q., & Jiang, W. (2006). Analysts' weighting of private and public information. Review of Financial Studies, 19(1), 319–355. https://doi.org/10.1093/rfs/hhj007
Chen, Q., and W. Jiang. “Analysts' weighting of private and public information.” Review of Financial Studies 19, no. 1 (January 1, 2006): 319–55. https://doi.org/10.1093/rfs/hhj007.
Chen Q, Jiang W. Analysts' weighting of private and public information. Review of Financial Studies. 2006 Jan 1;19(1):319–55.
Chen, Q., and W. Jiang. “Analysts' weighting of private and public information.” Review of Financial Studies, vol. 19, no. 1, Jan. 2006, pp. 319–55. Scopus, doi:10.1093/rfs/hhj007.
Chen Q, Jiang W. Analysts' weighting of private and public information. Review of Financial Studies. 2006 Jan 1;19(1):319–355.
Published In
Review of Financial Studies
DOI
EISSN
1465-7368
ISSN
0893-9454
Publication Date
January 1, 2006
Volume
19
Issue
1
Start / End Page
319 / 355
Related Subject Headings
- Finance
- 3801 Applied economics
- 3502 Banking, finance and investment
- 1502 Banking, Finance and Investment
- 1402 Applied Economics
- 1401 Economic Theory