Exogenous and Endogenous Attention and the Convergence of Analysts' Forecasts

The propensity of the forecasts of sell-side financial analysts to converge (or diverge) is a function of their exogenous and endogenous selective attention and overconfidence. When returns are negative, the endogenous form of selective attention-a static measure of analysts' goal-driven attent...

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Bibliographic Details
Published inThe journal of behavioral finance Vol. 20; no. 2; pp. 154 - 172
Main Authors Durand, Robert B., Limkriangkrai, Manapon, Fung, Lucia
Format Journal Article
LanguageEnglish
Published Philadelphia Routledge 03.04.2019
Taylor & Francis Ltd
Subjects
Attention deficit hyperactivity disorder
Behavioral finance
Converging/diverging forecasts
Distraction
Endogenous and exogenous selective attention
Overconfidence
Sell-side analysts
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Summary:The propensity of the forecasts of sell-side financial analysts to converge (or diverge) is a function of their exogenous and endogenous selective attention and overconfidence. When returns are negative, the endogenous form of selective attention-a static measure of analysts' goal-driven attention at a particular point in time-has a positive association with convergence. The exogenous form of selective attention-a relatively involuntary dynamic process of exogenous attentional shift driven by external changes in the market over time-is associated with a tendency for forecasts to diverge.
ISSN:1542-7560
1542-7579
DOI:10.1080/15427560.2018.1504783