@article{9331eaaa459c46d69728484b1c718fda,
title = "Overreaction and underreaction in analysts' forecasts",
abstract = "We examine hypotheses derived from behavioral decision theory regarding conditions that lead to overreaction and conditions that lead to underreaction in analysts' earnings forecasts. We argue that three heuristics jointly influence earnings forecasts: leniency, representativeness and anchoring and adjustment. We present a model for the concurrent influence of these heuristics on forecast errors, and examine three predictions of this model: (1) that there is a tendency towards overreaction in forecast changes and underreaction in forecast revisions, (2) that there is overreaction to positive forecast modifications and underreaction to negative forecast modifications, and (3) that these biases increase with the forecast horizon.",
keywords = "Analysts' earnings forecasts, C44, Forecasts errors, M10, M40, Optimism, Overreaction, Underreaction",
author = "Eli Amir and Yoav Ganzach",
note = "Funding Information: We thank IBES International Inc. for supplying the data and Sasson Bar Yossef, Larry Brown and Oded Sarig for helpful comments. The authors gratefully acknowledge the financial support given by KPMG Peat Marwick to Eli Amir and by the Davidson Center of the Hebrew University to Yoav Ganzach. ",
year = "1998",
month = nov,
day = "30",
doi = "10.1016/s0167-2681(98)00092-4",
language = "אנגלית",
volume = "37",
pages = "333--347",
journal = "Journal of Economic Behavior and Organization",
issn = "0167-2681",
publisher = "Elsevier B.V.",
number = "3",
}