Finance seminar - Dr Edward Shore - UNSW

A seminar by Dr Edward Shore from UNSW

Title: ‘Did You Catch the Game Last Night?’ Peer Group Effects in Sell-Side Analyst Forecasts

Abstract: Identifying interpersonal spillovers is challenging because most shocks either affect entire groups simultaneously or may transmit information alongside behavior. We study spillovers in sell-side forecasting using a setting that isolates exposure at the individual level. Linking equity analysts to their undergraduate alma maters, we use NCAA football championship outcomes as plausibly exogenous mood shocks that affect some analysts but not their coworkers within the same brokerage. We find that 'non-winning' analysts become more optimistic when exposed to affected colleagues, consistent with sentiment spillovers rather than information transmission. These spillovers are weaker in brokerages with greater female representation. Our findings show how individually targeted, non-fundamental shocks can be used to identify spillovers inside firms.

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