We conduct three experiments to investigate whether and why investors rely on analysts' stock recommendations, and how to mitigate potential overreliance. In Experiments 1 and 2, we find that investors who receive a buy (sell) recommendation judge a company to have higher (lower) investment...

Auditors are routinely exposed to preliminary audit evidence that is subsequently found to be erroneous. In an experiment with auditors as participants, we show that subsequently invalidated evidence relating to a tender award to a client continues to influence auditors' interpretation of this...

Regulators express concerns with investors’ unquestioning reliance on analysts’ recommendations, which prior research has shown to be associated with lower trading returns. Thus, regulators have published investor guides advising investors to conduct independent research and required analyst...

Timely voluntary disclosure of information by companies sometimes results in erroneous disclosure that must be later retracted (i.e., withdrawn) and/or corrected (i.e., replaced with a corrected disclosure). Although such retractions and corrections appear to be relatively easy and costless ways...