Straight Talkers and Vague Talkers: The Effects of Managerial Style in Earnings Conference Calls

Richard Zeckhauser

Working Paper Series from Harvard University, John F. Kennedy School of Government

Abstract: Managers conducting earnings conference calls display distinctive styles in their word choice. Some CEOs and CFOs are straight talkers. Others, by contrast, are vague talkers. Vague talkers routinely use qualifying words indicating uncertainty, such as "approximately", "probably", or "maybe". Analysts and the stock market attend to the style of managerial talk. They find earnings news less informative when managers are vague; they respond less and more slowly as a result. Thus, quantitative information and straightforward contextual information prove to be complements. Vague communications have the potential bene*fit of tamping down over-optimistic analysts expectations.

JEL-codes: G14 G30 (search for similar items in EconPapers)
Date: 2017-04
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Citations: View citations in EconPapers (5)

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Working Paper: Straight Talkers and Vague Talkers: The Effects of Managerial Style in Earnings Conference Calls (2017)
Working Paper: Straight Talkers and Vague Talkers: The Effects of Managerial Style in Earnings Conference Calls (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:harjfk:rwp17-017

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