We show that understanding the role of analysts' forecast bias is central to discovering the behavior that causes some … stocks to have high analyst forecast dispersion. This finding is important because stocks with high analyst forecast … dispersion contribute significantly to many important anomalies. We first explain how forecast bias produces significant negative …

analysts' forecast revisions and prior stock price changes. We validate this measure by examining whether analysts with lower …. We find that the stock price impacts of forecast revisions issued by analysts with higher PPI are larger than those … of directors rely more on analysts' forecast errors in their CEO turnover decisions when firms are followed by analysts …