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Information Uncertainty and Analyst Forecast Behavior.
- Source :
- Contemporary Accounting Research; Summer2006, Vol. 23 Issue 2, p565-590, 26p, 4 Charts, 3 Graphs
- Publication Year :
- 2006
-
Abstract
- Prior literature observes that information uncertainty exacerbates investor underreaction behavior. In this paper, I investigate whether, as professional investment intermediaries, sellside analysts suffer more behavioral biases in cases of greater information uncertainty. I show that greater information uncertainty predicts more positive (negative) forecast errors and subsequent forecast revisions following good (bad) news, which corroborates previous findings on the post-analyst-revision drift. The opposite effects of information uncertainty on forecast errors and subsequent forecast revisions following good versus bad news support the analyst underreaction hypothesis and are inconsistent with analyst forecast rationality or optimism suggested in prior literature. [ABSTRACT FROM AUTHOR]
- Subjects :
- INFORMATION-seeking behavior
UNCERTAINTY
INVESTMENT advisors
BEHAVIOR
BAD news
ERRORS
Subjects
Details
- Language :
- English
- ISSN :
- 08239150
- Volume :
- 23
- Issue :
- 2
- Database :
- Complementary Index
- Journal :
- Contemporary Accounting Research
- Publication Type :
- Academic Journal
- Accession number :
- 21351849
- Full Text :
- https://doi.org/10.1506/92CB-P8G9-2A31-PV0R