We examine whether finance professionals deviate from Bayes’ theorem on the processing of nondiagnostic information when forecasting quarterly earnings. Using field data from sell-side financial analysts and employing a regression discontinuity design, we find that analysts whose forecasts...

An accurate forecast of real return requires that accounting and debt adjustments be made to reported earnings. This article presents methodologies that investors can use to estimate the accounting and debt adjustments for individual companies and offers evidence, derived from a predictive...

We provide a comprehensive examination of regression-based earnings forecasts. Specifically, we evaluate forecasts of scaled and unscaled net income along a number of relevant dimensions including variable selection, estimation methods, estimation windows, and Winsorization. Overall, we find...

This study shows that firms collectively incur a cost for managing earnings and analyst expectations to meet earnings forecasts. We compare the coefficient in the regression of abnormal stock returns on earnings surprise (the earnings response coefficient (ERC)) across ranges of earnings...

We examine how winning an all-star award affects analyst behavior. Using a novel dataset on analyst rankings, we employ a regression discontinuity design that compares the research outputs of third-place all-star analysts and runner-up analysts who barely miss the distinction. We find that...

Eine Methode, um das systematische und unsystematische Risiko sowie den Einfluss externer Einflussfaktoren auf Aktienrenditen zu bestimmen, ist die Zerlegung der Varianz von Aktienrenditen. Allerdings waren die bisher angewendeten Methoden der Varianzzerlegung nur unzureichend dazu geeignet,...