منابع مشابه
Analysts, Incentives, and Exaggeration
Sell-side analysts are compensated, at least in part, by brokerage commissions. These commissions create an incentive to bias forecasts to generate trade. Thus, analysts have clear economic incentives to deceive and traders have economic incentives to detect deception. Prior analytical theories of information transmission games starkly predict that there will always be some deception (with trad...
متن کاملMeasuring Herding and Exaggeration by Equity Analysts and Other Opinion Sellers
Firms and individuals who sell opinions may bias their reports for either behavioral or strategic reasons. This paper proposes a methodology for measuring these biases, particularly whether opinion producers under or over emphasize their private information, i.e. whether they herd or exaggerate their differences with the consensus. Applying the methodology to I/B/E/S analysts reveals that they ...
متن کاملThe Distorting Incentives of Relative Performance Evaluation for Equity Analysts∗
We study the strategic behavior of equity analysts whose compensation is based on relative performance of their stock recommendations. Our model predicts that riskaverse analysts issue identical recommendations to avoid falling behind their peers. Top analyst awards, on the other hand, motivate analysts to issue bold recommendations. However, when the stock return is very volatile, the herding ...
متن کاملRational exaggeration and counter-exaggeration in information aggregation games
We study an information aggregation game in which each of a finite collection of “senders” receives a private signal and submits a report to the center, who then makes a decision based on the average of these reports. The integration of three features distinguishes our framework from the related literature: players’ reports are aggregated by a mechanistic averaging rule, their strategy sets are...
متن کاملPerceived Importance of Systems Analysts' Job Skills, Roles, and Non-Salary Incentives
System analysts are service providers who are required to work closely with users for the purpose of defining, developing and implementing computer-based systems. Analysts and users in pdvate organizations may have different expectations and proficiencies than those in public organizations, in part due to the types of appli. cations required. Beliefs about how others are supposed to perform and...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2008
ISSN: 1556-5068
DOI: 10.2139/ssrn.1113953