Forecast Rounding, Forecast Uncertainty, Managers’ Language, and Investors’ Judgments

Author:

Buchanan Jessica L.1ORCID,Piercey M. David2ORCID

Affiliation:

1. Providence College

2. University of Massachusetts Amherst

Abstract

ABSTRACT We investigate how rounded (e.g., 10 percent) versus unrounded (e.g., 9.73 percent, 10.00 percent, or 10.27 percent) sales growth forecasts impact investor judgment. We hypothesize that investors are more willing to invest in a company when the degree of rounding matches the amount of forecast uncertainty (i.e., rounded forecasts in more uncertain environments and unrounded forecasts in less uncertain environments). We also hypothesize that managers can offset the negative impact of a mismatch between forecast rounding and forecast uncertainty by using more immediate language in their forecasts. In a first experiment using M.B.A. students as investors, we find a combination of support and partial support for our hypotheses. However, in a second experiment using online workers and a third experiment using M.B.A. students, we fail to find support for our hypotheses. Overall, we fail to find replicable effects of forecast rounding, forecast uncertainty, and language immediacy on investors’ judgments.

Publisher

American Accounting Association

Subject

Pharmacology (medical)

同舟云学术

1.学者识别学者识别

2.学术分析学术分析

3.人才评估人才评估

"同舟云学术"是以全球学者为主线,采集、加工和组织学术论文而形成的新型学术文献查询和分析系统,可以对全球学者进行文献检索和人才价值评估。用户可以通过关注某些学科领域的顶尖人物而持续追踪该领域的学科进展和研究前沿。经过近期的数据扩容,当前同舟云学术共收录了国内外主流学术期刊6万余种,收集的期刊论文及会议论文总量共计约1.5亿篇,并以每天添加12000余篇中外论文的速度递增。我们也可以为用户提供个性化、定制化的学者数据。欢迎来电咨询!咨询电话:010-8811{复制后删除}0370

www.globalauthorid.com

TOP

Copyright © 2019-2024 北京同舟云网络信息技术有限公司
京公网安备11010802033243号  京ICP备18003416号-3