Analyst Earnings Forecasts, Individual Investors’Expectations and Trading Volume: An Experimental Approach

Thanh Huong Dinh, Jean-François Gajewski and Duc Khuong Nguyen
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Thanh Huong Dinh: Accenture France, University of Paris East Créteil Val-de-Marne
Jean-François Gajewski: IREGE, University Savoie Mont Blanc

Bankers, Markets & Investors, 2016, issue 141, 20-34

Abstract: This paper studies how analysts’ earnings forecasts affect investors’ expectations and trading decisions. From an experiment built on a double-auction market, we find that investors partially incorporate the forecasting information in their expectations and trading decisions. Investors partly correct for analysts’ forecast errors and their expectations are less heterogeneous than analysts’ forecasts. As for the trading volume, it is negatively driven by the heterogeneity of the analysts’ forecasts but positively by the size of the forecast errors.

Keywords: Analysts’ Forecasts; Investor Expectations; Trading Volume; Experimental Asset Market; Earnings Announcement (search for similar items in EconPapers)
JEL-codes: C91 G12 M41 (search for similar items in EconPapers)
Date: 2016
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Related works:
Working Paper: Analyst Earnings Forecasts, Individual Investors’Expectations and Trading Volume: An Experimental Approach (2016)
Working Paper: Analyst earnings forecasts, individual investors' expectations and trading volume: An experimental approach (2016)
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