• Media type: E-Book
  • Title: Decision Fatigue and Heuristic Analyst Forecasts
  • Contributor: Hirshleifer, David [Author]; Lourie, Ben [Other]; Teoh, Siew Hong [Other]; Levi, Yaron [Other]
  • Corporation: National Bureau of Economic Research
  • Published: Cambridge, Mass: National Bureau of Economic Research, February 2018
  • Published in: NBER working paper series ; no. w24293
  • Extent: 1 Online-Ressource
  • Language: English
  • DOI: 10.3386/w24293
  • Identifier:
  • Reproduction note: Hardcopy version available to institutional subscribers
  • Origination:
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  • Description: Psychological evidence indicates that decision quality declines after an extensive session of decision-making, a phenomenon known as decision fatigue. We study whether decision fatigue affects analysts' judgments. Analysts cover multiple firms and often issue several forecasts in a single day. We find that forecast accuracy declines over the course of a day as the number of forecasts the analyst has already issued increases. Also consistent with decision fatigue, we find that the more forecasts an analyst issues, the higher the likelihood the analyst resorts to more heuristic decisions by herding more closely with the consensus forecast, by self-herding (i.e., reissuing their own previous outstanding forecasts), and by issuing a rounded forecast. Finally, we find that the stock market understands these effects and discounts for analyst decision fatigue
  • Access State: Open Access