Analysts earnings forecasts: Coexistence and dynamics of overconfidence and strategic incentives

Peter de Goeij, Katrien Bosquet, Kristien Smedts

Research output: Contribution to journalArticleScientificpeer-review


This paper formulates a two-stage model to capture the decision process of financial analysts when issuing earnings forecasts. Our model extends the model of Chen and Jiang [(2005). Analysts’ weighting of private and public information. Review of Financial Studies, 19 (1), 319–355], by allowing for a distortion of forecasts independent of whether an analyst has private information. Using quarterly earnings forecasts, we provide empirical evidence on the coexistence of overconfidence and strategic incentives. Financial analysts overweight their private information and at the same time strategically inflate their forecast
Original languageEnglish
Pages (from-to)307-322
JournalAccounting and Business Research
Issue number3
Publication statusPublished - 2015



  • financial analysts
  • earnings forecasts
  • overconfidence
  • conflicts of interest

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