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

Working Paper No. 23425 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”, “proba...

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Bibliographic Details
Published inNBER Working Paper Series p. 23425
Main Authors Dzieliński, Michał, Wagner, Alexander F, Zeckhauser, Richard J
Format Paper
LanguageEnglish
Published Cambridge National Bureau of Economic Research, Inc 01.05.2017
Subjects
Communication
Earnings
Economic theory
Managerial skills
Managers
Organization theory
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Summary:Working Paper No. 23425 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 benefit of tamping down over-optimistic analysts expectations.
ISSN:0898-2937
DOI:10.3386/w23425