Abstract
We study whether individuals form extrapolative beliefs across different tasks. In line with cross-extrapolation, equity analysts who experience bad news from some of their coverage firms become overly pessimistic about other firms in their coverage. This leads to disagreement among analysts and has implications for the stock market, as we observe effects on trading volume, return volatility, and pricing. Our findings highlight the relevance of non-domain-specific belief models.
| Original language | English |
|---|---|
| Pages (from-to) | 3128-3146 |
| Number of pages | 19 |
| Journal | Management Science |
| Volume | 72 |
| Issue number | 4 |
| Early online date | 13 Aug 2025 |
| DOIs | |
| Publication status | Published - Apr 2026 |
Bibliographical note
Publisher Copyright:© (2026), (INFORMS Inst.for Operations Res.and the Management Sciences), All Rights Reserved.
Keywords
- behavioral finance extrapolative beliefs experience effects financial analyst
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