Analysts' Disagreement and Investor Decisions

@inproceedings{Gick2018AnalystsDA,
  title={Analysts' Disagreement and Investor Decisions},
  author={Wolfgang Gick and Alex Weissensteiner},
  year={2018}
}
Earning forecasts disclosed by financial analysts are known to be overly optimistic. Since an investor relies on their expertise, the question arises whether he would take analyst recommendations at face value or instead structure consultation with differently upward-biased analysts in a way that would permit him to make more accurate investment decisions. We characterize disagreement in a strategic disclosure game where two analysts disclose to an investor who has commitment power. This setup… CONTINUE READING