Behavioral finance is an emerging field of study which is relatively new and having its provenance from decision theory. Behavioral finance is a multidisciplinary research area that combines psychology and finance and investigates the issues that impact the decision-making process and explains...

We posit that management forecasts that are predictable transformations of realized earnings without random errors are more informative than unbiased forecasts which manifest small but unpredictable errors, even if biased forecasts are less accurate. Consistent with this intuition we find that...