Abstract
AbstractWe use the earnings forecast revisions during the period 2005–2019 to study the performance of confirmatory bias in China. As we have found, analysts are less likely to make earnings forecast revisions when the latest two signals are opposite or different from their previous beliefs. In addition, we find confirmatory bias has a significantly positive influence on analysts' forecast dispersions, especially when new signals are negative. Finally, we extend the practical significance by combining confirmatory bias with pricing efficiency and find significant harms, especially in bull markets. Uninformed investors and market supervisors should take precautions to avoid this bias.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
