Memory, Retrieved Context, and Bias in Management Earnings Forecasts

Published Online:https://doi.org/10.1287/mnsc.2022.04053

References

  • Ahmed A, Christensen B, Olson A, Yust C (2019) Déjà vu: The effect of executives and directors with prior banking crisis experience on bank outcomes around the global financial crisis. Contemporary Accounting Res. 36(2):958–998.CrossrefGoogle Scholar
  • Ajinkya B, Bhojraj S, Sengupta P (2005) The association between outside directors, institutional investors and the properties of management earnings forecasts. J. Accounting Res. 43(3):343–376.CrossrefGoogle Scholar
  • Andersen S, Hanspal T, Nielsen KM (2019) Once bitten, twice shy: The power of personal experiences in risk taking. J. Financial Econom. 132(3):97–117.CrossrefGoogle Scholar
  • Baik B, Farber DB, Lee S (2011) CEO ability and management earnings forecasts. Contemporary Accounting Res. 28(5):1645–1668.CrossrefGoogle Scholar
  • Balakrishnan K, Watts R, Zuo L (2016) The effect of accounting conservatism on corporate investment during the global financial crisis. J. Bus. Finance Accounting 43(5–6):513–542.CrossrefGoogle Scholar
  • Bamber LS, Jiang JX, Wang IY (2010) What’s my style? The influence of top managers on voluntary corporate financial disclosure. Accounting Rev. 85(4):1131–1162.CrossrefGoogle Scholar
  • Bergman NK, Roychowdhury S (2008) Investor sentiment and corporate disclosure. J. Accounting Res. 46(5):1057–1083.CrossrefGoogle Scholar
  • Bertrand M, Schoar A (2003) Managing with style: The effect of managers on firm policies. Quart. J. Econom. 118(4):1169–1208.CrossrefGoogle Scholar
  • Beyer A, Cohen DA, Lys TZ, Walther BR (2010) The financial reporting environment: Review of the recent literature. J. Accounting Econom. 50(2–3):296–343.CrossrefGoogle Scholar
  • Bochkay K, Chychyla R, Nanda D (2019) Dynamics of CEO disclosure style. Accounting Rev. 94(4):103–140.CrossrefGoogle Scholar
  • Bordalo P, Gennaioli N, Shleifer A (2020) Memory, attention, and choice. Quart. J. Econom. 135(3):1399–1442.CrossrefGoogle Scholar
  • Bordalo P, Burro G, Coffman K, Gennaioli N, Shleifer A (2025) Imagining the future: Memory, simulation, and beliefs. Rev. Econom. Stud. 92(3):1532–1563.CrossrefGoogle Scholar
  • Bordalo P, Conlon JJ, Gennaioli N, Kwon SY, Shleifer A (2023) Memory and probability. Quart. J. Econom. 138(1):265–311.CrossrefGoogle Scholar
  • Boutros M, Ben-David I, Graham JR, Harvey CR, Payne JW (2020) The persistence of miscalibration. Working paper, Duke University, Durham, NC.Google Scholar
  • Brown T (1824) Lectures on the Philosophy of the Human Mind (John Grigg and William P. Bason, Philadelphia).Google Scholar
  • Calkins MW (1896) Association. An essay analytic and experimental. Psych. Rev. Monograph Suppl. 1(2):i–56.CrossrefGoogle Scholar
  • Campbell T, Gallmeyer M, Johnson S, Rutherford J, Stanley B (2011) CEO optimism and forced turnover. J. Financial Econom. 101(3):695–712.CrossrefGoogle Scholar
  • Campello M, Graham JR, Harvey CR (2010) The real effects of financial constraints: Evidence from a financial crisis. J. Financial Econom. 97(3):470–487.CrossrefGoogle Scholar
  • Chen W, Wu H, Zhang L (2021) Terrorist attacks, managerial sentiment, and corporate disclosures. Accounting Rev. 96(3):165–190.CrossrefGoogle Scholar
  • Chen C, Chen Y, Pittman JA, Podolski EJ, Veeraraghavan M (2022) Emotions and managerial judgment: Evidence from sunshine exposure. Accounting Rev. 97(3):179–203.CrossrefGoogle Scholar
  • Choi J-H, Ziebart DA (2004) Management earnings forecasts and the market’s reaction to predicted bias in the forecast. Asia-Pacific J. Accounting Econom. 11(2):167–192.CrossrefGoogle Scholar
  • Ciconte W, Kirk M, Tucker JW (2014) Does the midpoint of range earnings forecasts represent managers’ expectations? Rev. Accounting Stud. 19(2):628–660.CrossrefGoogle Scholar
  • Copeland R, Farrell M (2023) Jamie Dimon reprises 2008 role as rescuer of a failing bank. New York Times (March 30), https://www.nytimes.com/2023/03/30/business/jamie-dimon-silicon-valley-bank-collapse.html#:~:text=Dimon%20was%20so%20scarred%20by,the%20new%20subsidiaries'%20prior%20conduct.Google Scholar
  • Cuculiza C, Antoniou C, Kumar A, Maligkris A (2021) Terrorist attacks, analyst sentiment, and earnings forecasts. Management Sci. 67(4):2579–2608.LinkGoogle Scholar
  • Das S, Kim K, Patro S (2011) An analysis of managerial use and market consequences of earnings management and expectation management. Accounting Rev. 86(6):1935–1967.CrossrefGoogle Scholar
  • Demerjian P, Lev B, McVay S (2012) Quantifying managerial ability: A new measure and validity tests. Management Sci. 58(7):1229–1248.LinkGoogle Scholar
  • Dikolli SS, Mayew WJ, Nanda D (2014) CEO tenure and the performance-turnover relation. Rev. Accounting Stud. 19:281–327.CrossrefGoogle Scholar
  • Dittmar A, Duchin R (2016) Looking in the rearview mirror: The effect of managers’ professional experience on corporate financial policy. Rev. Financial Stud. 29(3):565–602.Google Scholar
  • Dyreng SD, Hanlon M, Maydew EL (2010) The effects of executives on corporate tax avoidance. Accounting Rev. 85(4):1163–1189.CrossrefGoogle Scholar
  • Francoeur C, Li Y, Singer Z, Zhang J (2023) Earnings forecasts of female CEOs: Quality and consequences. Rev. Accounting Stud. 28:1721–1764.CrossrefGoogle Scholar
  • Ghaderi M, Kilic M, Seo SB (2022) Learning, slowly unfolding disasters, and asset prices. J. Financial Econom. 143(1):527–549.CrossrefGoogle Scholar
  • Hanlon M, Yeung K, Zuo L (2022) Behavioral economics of accounting: A review of archival research on individual decision makers. Contemporary Accounting Res. 39(2):1150–1214.CrossrefGoogle Scholar
  • Heflin F, Kross WJ, Suk I (2016) Asymmetric effects of regulation FD on management earnings forecasts. Accounting Rev. 91(1):119–152.CrossrefGoogle Scholar
  • Hirst DE, Koonce L, Venkataraman S (2008) Management earnings forecasts: A review and framework. Accounting Horizons 22(3):315–338.CrossrefGoogle Scholar
  • Hope OK, Li C, Ma MS, Su Z (2023) Is silence golden sometimes? Management guidance withdrawals during the COVID-19 pandemic. Rev. Accounting Stud. 28(4):2319–2360.CrossrefGoogle Scholar
  • Howard MW, Kahana MJ (1999) Contextual variability and serial position effects in free recall. J. Experiment. Psych. Learn. Memory Cognition 25(4):923–941.CrossrefGoogle Scholar
  • Howard MW, Kahana MJ (2002) A distributed representation of temporal context. J. Math. Psych. 46(3):269–299.CrossrefGoogle Scholar
  • Howard MW, Viskontas IV, Shankar KH, Fried I (2012) Ensembles of human MTL neurons “jump back in time” in response to a repeated stimulus. Hippocampus 22(9):1833–1847.CrossrefGoogle Scholar
  • Hribar P, Yang H (2016) CEO overconfidence and management forecasting. Contemporary Accounting Res. 33(1):204–227.CrossrefGoogle Scholar
  • Huang A, Hui KW, Li RZ (2019) Federal judge ideology: A new measure of ex ante litigation risk. J. Accounting Res. 57(2):431–489.CrossrefGoogle Scholar
  • Hutton AP, Lee LF, Shu SZ (2012) Do managers always know better? The relative accuracy of management and analyst forecasts. J. Accounting Res. 50(5):1217–1244.CrossrefGoogle Scholar
  • Ittner CD, Michels J (2017) Risk-based forecasting and planning and management earnings forecasts. Rev. Accounting Stud. 22(3):1005–1047.CrossrefGoogle Scholar
  • Kahana MJ (2012) Foundations of Human Memory (Oxford University Press, Oxford, UK).Google Scholar
  • Kahle KM, Stulz RM (2013) Access to capital, investment, and the financial crisis. J. Financial Econom. 110(2):280–299.CrossrefGoogle Scholar
  • Kahneman D (2011) Thinking, Fast and Slow (Penguin Books, London).Google Scholar
  • Kahneman D, Riis J (2005) Living and thinking about it: Two perspectives on life. Huppert FA, Baylis N, Keverne B, eds. The Science of Well-Being (Oxford University Press, Oxford, UK), 285–304.CrossrefGoogle Scholar
  • Kovbasyuk S, Spagnolo G (2024) Memory and markets. Rev. Econom. Stud. 91(3):1775–1806.CrossrefGoogle Scholar
  • Kuang YF, Li L, Lu LY, Qin B (2022) Death is a law: Death of former colleagues and management forecasts. Accounting Organizations Soc. 102:101350.CrossrefGoogle Scholar
  • Kwak B, Ro BT, Suk I (2012) The composition of top management with general counsel and voluntary information disclosure. J. Accounting Econom. 54(1):19–41.CrossrefGoogle Scholar
  • Loughran T, McDonald B (2014) Measuring readability in financial disclosures. J. Finance 69(4):1643–1671.CrossrefGoogle Scholar
  • Loughran T, McDonald B (2016) Textual analysis in accounting and finance: A survey. J. Accounting Res. 54(4):1187–1230.CrossrefGoogle Scholar
  • Lu Y, Skinner DJ (2020) Moving forward: Management forecasts and earnings announcement returns. Working paper, University of Chicago, Chicago.Google Scholar
  • Malmendier U (2021) Experience effects in finance: Foundations, applications, and future directions. Rev. Finance 25(5):1339–1363.CrossrefGoogle Scholar
  • Malmendier U, Nagel S (2011) Depression babies: Do macroeconomic experiences affect risk taking? Quart. J. Econom. 126(1):373–416.CrossrefGoogle Scholar
  • Malmendier U, Nagel S (2016) Learning from inflation experiences. Quart. J. Econom. 131(1):53–87.CrossrefGoogle Scholar
  • Malmendier U, Shen LS (2024) Scarred consumption. Amer. Econom. J. Macroeconomics 16(1):322–355.CrossrefGoogle Scholar
  • Malmendier U, Tate G (2005) CEO overconfidence and corporate investment. J. Finance 60(6):2660–2700.CrossrefGoogle Scholar
  • Malmendier U, Wachter JA (2022) Memory of past experiences and economic decisions. Working paper, University of California, Berkeley.Google Scholar
  • Malmendier U, Nagel S, Yan Z (2021) The making of hawks and doves. J. Monetary Econom. 117:19–42.CrossrefGoogle Scholar
  • Markov S, Tamayo A (2006) Predictability in financial analyst forecast errors: Learning or irrationality? J. Accounting Res. 44(5):725–761.CrossrefGoogle Scholar
  • Matsumoto DA (2002) Management’s incentives to avoid negative earnings surprises. Accounting Rev. 77(3):483–514.CrossrefGoogle Scholar
  • Mullainathan S (2002) A memory-based model of bounded rationality. Quart. J. Econom. 117(3):735–774.CrossrefGoogle Scholar
  • Nagar V, Nanda D, Wysocki P (2003) Discretionary disclosure and stock-based incentives. J. Accounting Econom. 34(1–3):283–309.CrossrefGoogle Scholar
  • Rogers JL, Stocken PC (2005) Credibility of management forecasts. Accounting Rev. 80(4):1233–1260.CrossrefGoogle Scholar
  • Rubin DC, Berntsen D (2009) The frequency of voluntary and involuntary autobiographical memories across the life span. Memory Cognition 37(5):679–688.CrossrefGoogle Scholar
  • Schoar A, Zuo L (2017) Shaped by booms and busts: How the economy impacts CEO careers and management styles. Rev. Financial Stud. 30(5):1425–1456.CrossrefGoogle Scholar
  • Tversky A, Kahneman D (1973) A heuristic for judging frequency and probability. Cognitive Psych. 5(2):207–232.CrossrefGoogle Scholar
  • Tversky A, Kahneman D (1974) Judgment under uncertainty: Heuristics and biases. Science 185(4157):1124–1131.CrossrefGoogle Scholar
  • Wachter JA, Kahana MJ (2024) A retrieved-context theory of financial decisions. Quart. J. Econom. 139(2):1095–1147.CrossrefGoogle Scholar
  • Wachter JA, Zhu Y (2023) Learning with rare disasters. Working paper, University of Pennsylvania, Philadelphia.Google Scholar
  • Wang IY (2007) Private earnings guidance and its implications for disclosure regulation. Accounting Rev. 82(5):1299–1332.CrossrefGoogle Scholar
  • Zhou FS (2021) Disclosure dynamics and investor learning. Management Sci. 67(6):3429–3446.LinkGoogle Scholar
  • Zuo L (2016) The informational feedback effect of stock prices on management forecasts. J. Accounting Econom. 61(2–3):391–413.CrossrefGoogle Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.