Do investors experience heuristics in earnings forecasting?

Artikel

This research aims to examine empirically the overreliance on representativeness heuristic and anchoring-adjustment influences experienced by investors in forecasting future earnings. This research was a laboratory experiment with a design of 2x2 full factorial between subject. The results showed that representativeness heuristics were only experienced by investors who obtained positive information. Besides, this study also shows that investors do not overreliance on anchoring-adjustment heuristics. Generally, this research shows that cognitive biases occur when the information presented is of good value so that it can be taken into consideration for investors to be more careful in making predictions. Multiple benchmark information can be used as a consideration in evaluating the company's earnings and stock performance.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Verslas: Teorija ir praktika / Business: Theory and Practice ; ISSN: 1822-4202 ; Volume: 21 ; Year: 2020 ; Issue: 2 ; Pages: 686-694 ; Vilnius: Vilnius Gediminas Technical University

Classification and Topics

• Classification: Management ; Design of Experiments: Laboratory, Individual ; Behavioral Finance: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets‡ ; Accounting
• Subject: representativeness ; anchoring-adjustment ; multiple benchmark information

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Praditha, Riza ; Haliah, Haliah ; Habbe, Abdul Hamid ; Rura, Yohanis
• Event: Veröffentlichung
• (who): Vilnius Gediminas Technical University
• (where): Vilnius
• (when): 2020

Further information

• DOI: doi:10.3846/btp.2020.12018
• Handle: http://hdl.handle.net/10419/248067
• Last update: 10.03.2025, 11:43 AM CET