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Judgment effects of familiarity with an analyst’s name

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  • Chen, Wei
  • Tan, Hun-Tong

Abstract

We conduct an experiment with MBA students where we manipulate whether participants are exposed to an analyst’s name in Stage 1, and whether they are given a cue in Stage 2 about the particular analyst’s prior performance as an All-star analyst. We find that in the absence of a favorable performance cue about the analyst, mere exposure to the analyst’s name enhances perceived analyst credibility, which in turn influences the investors’ earnings estimates. This suggests a benefit to analysts in terms of building credibility merely through media exposure that cannot be explained by performance. In fact, a diagnostic cue such as the analyst’s high prior performance no longer matters to investors once they have prior exposure to the analyst’s name. However, this enhancement of an analyst’s credibility through investors’ prior exposure to his/her name is reversed when the analyst’s forecast turns out to be inaccurate.

Suggested Citation

  • Chen, Wei & Tan, Hun-Tong, 2013. "Judgment effects of familiarity with an analyst’s name," Accounting, Organizations and Society, Elsevier, vol. 38(3), pages 214-227.
    • Handle: RePEc:eee:aosoci:v:38:y:2013:i:3:p:214-227
    DOI: 10.1016/j.aos.2013.02.001
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    References listed on IDEAS

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    Cited by:

    1. Xiaoxiao Song, 2019. "Effects Of Analysts’ Country Familiarity On Forecast Behavior: Evidence From Chinese Cross-Listed Firms In The United States," Accounting & Taxation, The Institute for Business and Finance Research, vol. 11(1), pages 35-46.
    2. Pavel Castka & Charles J. Corbett, 2016. "Governance of Eco-Labels: Expert Opinion and Media Coverage," Journal of Business Ethics, Springer, vol. 135(2), pages 309-326, May.
    3. Önkal, Dilek & Sinan Gönül, M. & Goodwin, Paul & Thomson, Mary & Öz, Esra, 2017. "Evaluating expert advice in forecasting: Users’ reactions to presumed vs. experienced credibility," International Journal of Forecasting, Elsevier, vol. 33(1), pages 280-297.
    4. Kelton, Andrea Seaton & Montague, Norma R., 2018. "The unintended consequences of uncertainty disclosures made by auditors and managers on nonprofessional investor judgments," Accounting, Organizations and Society, Elsevier, vol. 65(C), pages 44-55.
    5. Chen, Wei & Tan, Hun-Tong & Wang, Elaine Ying, 2023. "The impact of repeated notifications and notification checking mode on investors' reactions to managers’ strategic positive title emphasis," Accounting, Organizations and Society, Elsevier, vol. 110(C).

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