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Experience, information asymmetry, and rational forecast bias

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  • April Knill
  • Kristina Minnick
  • Ali Nejadmalayeri

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  • April Knill & Kristina Minnick & Ali Nejadmalayeri, 2012. "Experience, information asymmetry, and rational forecast bias," Review of Quantitative Finance and Accounting, Springer, vol. 39(2), pages 241-272, August.
    • Handle: RePEc:kap:rqfnac:v:39:y:2012:i:2:p:241-272
    DOI: 10.1007/s11156-011-0252-1
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    References listed on IDEAS

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    1. Han, Bong H & Manry, David & Shaw, Wayne, 2001. "Improving the Precision of Analysts' Earnings Forecasts by Adjusting for Predictable Bias," Review of Quantitative Finance and Accounting, Springer, vol. 17(1), pages 81-98, July.
    2. Mest, David P & Plummer, Elizabeth, 2003. "Analysts' Rationality and Forecast Bias: Evidence from Sales Forecasts," Review of Quantitative Finance and Accounting, Springer, vol. 21(2), pages 103-122, September.
    3. Carter, Richard B & Manaster, Steven, 1990. "Initial Public Offerings and Underwriter Reputation," Journal of Finance, American Finance Association, vol. 45(4), pages 1045-1067, September.
    4. Steven X. Zheng & David A. Stangeland, 2007. "IPO Underpricing, Firm Quality, and Analyst Forecasts," Financial Management, Financial Management Association International, vol. 36(2), pages 1-20, July.
    5. Beyer, Anne, 2008. "Financial analysts' forecast revisions and managers' reporting behavior," Journal of Accounting and Economics, Elsevier, vol. 46(2-3), pages 334-348, December.
    6. Afshad Irani, 2004. "The Effect of Regulation Fair Disclosure on the Relevance of Conference Calls to Financial Analysts," Review of Quantitative Finance and Accounting, Springer, vol. 22(1), pages 15-28, January.
    7. Mikhail, MB & Walther, BR & Willis, RH, 1997. "Do security analysts improve their performance with experience?," Journal of Accounting Research, Wiley Blackwell, vol. 35, pages 131-157.
    8. Sundaresh Ramnath, 2002. "Investor and Analyst Reactions to Earnings Announcements of Related Firms: An Empirical Analysis," Journal of Accounting Research, Wiley Blackwell, vol. 40(5), pages 1351-1376, December.
    9. Bernhardt, Dan & Campello, Murillo & Kutsoati, Edward, 2006. "Who herds?," Journal of Financial Economics, Elsevier, vol. 80(3), pages 657-675, June.
    10. Michael B. Clement & Senyo Y. Tse, 2005. "Financial Analyst Characteristics and Herding Behavior in Forecasting," Journal of Finance, American Finance Association, vol. 60(1), pages 307-341, February.
    11. Clement, Michael B., 1999. "Analyst forecast accuracy: Do ability, resources, and portfolio complexity matter?," Journal of Accounting and Economics, Elsevier, vol. 27(3), pages 285-303, July.
    12. Stacey R Nutt & John C Easterwood & Cintia M Easterwood, 1999. "New Evidence on Serial Correlation in Analyst Forecast Errors," Financial Management, Financial Management Association, vol. 28(4), Winter.
    13. Petersen, Mitchell A & Rajan, Raghuram G, 1994. "The Benefits of Lending Relationships: Evidence from Small Business Data," Journal of Finance, American Finance Association, vol. 49(1), pages 3-37, March.
    14. X. Frank Zhang, 2006. "Information Uncertainty and Stock Returns," Journal of Finance, American Finance Association, vol. 61(1), pages 105-137, February.
    15. Zhaoyang Gu & Jian Xue, 2007. "Do analysts overreact to extreme good news in earnings?," Review of Quantitative Finance and Accounting, Springer, vol. 29(4), pages 415-431, November.
    16. Bannister, James W & Newman, Harry A, 1996. "Accrual Usage to Manage Earnings toward Financial Analysts' Forecasts," Review of Quantitative Finance and Accounting, Springer, vol. 7(3), pages 259-278, November.
    17. Brown, Stephen & Hillegeist, Stephen A. & Lo, Kin, 2004. "Conference calls and information asymmetry," Journal of Accounting and Economics, Elsevier, vol. 37(3), pages 343-366, September.
    18. Amir Sufi, 2007. "Information Asymmetry and Financing Arrangements: Evidence from Syndicated Loans," Journal of Finance, American Finance Association, vol. 62(2), pages 629-668, April.
    19. Fama, Eugene F. & French, Kenneth R., 1997. "Industry costs of equity," Journal of Financial Economics, Elsevier, vol. 43(2), pages 153-193, February.
    20. Dechow, Patricia M. & Kothari, S. P. & L. Watts, Ross, 1998. "The relation between earnings and cash flows," Journal of Accounting and Economics, Elsevier, vol. 25(2), pages 133-168, May.
    21. Zhou, Rhea Tingyu & Lai, Rose Neng, 2009. "Herding and information based trading," Journal of Empirical Finance, Elsevier, vol. 16(3), pages 388-393, June.
    22. Tim Loughran & Jay Ritter, 2004. "Why Has IPO Underpricing Changed Over Time?," Financial Management, Financial Management Association, vol. 33(3), Fall.
    23. Boni, Leslie & Womack, Kent L., 2006. "Analysts, Industries, and Price Momentum," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 41(1), pages 85-109, March.
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    25. Conrad, Jennifer & Cornell, Bradford & Landsman, Wayne R. & Rountree, Brian R., 2006. "How Do Analyst Recommendations Respond to Major News?," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 41(1), pages 25-49, March.
    26. Hirschey, Mark & Richardson, Vernon J., 2004. "Are scientific indicators of patent quality useful to investors?," Journal of Empirical Finance, Elsevier, vol. 11(1), pages 91-107, January.
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    28. de Jong, Pieter J. & Apilado, Vince P., 2009. "The changing relationship between earnings expectations and earnings for value and growth stocks during Reg FD," Journal of Banking & Finance, Elsevier, vol. 33(2), pages 435-442, February.
    29. Kwon, Sung S, 2002. "Financial Analysts' Forecast Accuracy and Dispersion: High-Tech versus Low-Tech Stocks," Review of Quantitative Finance and Accounting, Springer, vol. 19(1), pages 65-91, July.
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    Cited by:

    1. Yi Dong & Nan Hu & Xu Li & Ling Liu, 2017. "Analyst Firm Coverage and Forecast Accuracy: The Effect of Regulation Fair Disclosure," Abacus, Accounting Foundation, University of Sydney, vol. 53(4), pages 450-484, December.
    2. Li, Wanyun, 2022. "Disclosure of internal control material weaknesses and optimism in analyst earnings forecasts," International Journal of Accounting Information Systems, Elsevier, vol. 44(C).
    3. Bruno Deschamps, 2015. "Are aggregate corporate earnings forecasts unbiased and efficient?," Review of Quantitative Finance and Accounting, Springer, vol. 45(4), pages 803-818, November.
    4. Chunlai Ye & Lin-Hui Yu, 2018. "The effect of restatements on trading volume reactions to earnings announcements," Review of Quantitative Finance and Accounting, Springer, vol. 50(1), pages 129-180, January.

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    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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