Using counter-explanation to limit analysts' forecast optimism

• 成果类型: Article
• 署名作者: Kadous, K; Krische, SD; Sedor, LM
• 署名单位: Emory University; University of Illinois System; University of Illinois Urbana-Champaign; University of Notre Dame
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr.2006.81.2.377
• 发表日期: 2006
• 页码: 377-397
• 关键词: EARNINGS FORECASTS; negative earnings; INFORMATION; availability; valuation; accuracy; recommendations; incentives; JUDGMENT; errors

摘要

Prior research demonstrates that forecast optimism is, in part, a consequence of analysts' cognitive reactions to the scenarios managers use to communicate future plans. In two experiments, we examine whether counter-explanation (explaining why managers' plans could fail) reduces scenario-induced optimism. We find that when compared to analysts not asked to generate counter-explanations, analysts who complete the relatively easy task of generating few counter-explanations make less optimistic forecasts, but analysts who complete the relatively difficult task of generating many counter-explanations do not. Results demonstrate the usefulness of a cognitive, theory-based mechanism for reducing forecast optimism and suggest a boundary condition for the use of that mechanism.