Experienced Financial Managers’ Views of the Relationships Among Self-Serving Attribution Bias, Overconfidence, and the Issuance of Management Forecasts: A Replication

9 Pages Posted: 27 Feb 2015

See all articles by Robert Libby

Robert Libby

Cornell University - Samuel Curtis Johnson Graduate School of Management; Cornell SC Johnson College of Business

Kristina M. Rennekamp

SC Johnson Graduate School of Management; Cornell SC Johnson College of Business

Date Written: February 25, 2015

Abstract

This paper independently replicates the results of the survey of experienced financial managers reported in section 4 of Libby and Rennekamp (2012). Using the same questions as Libby and Rennekamp (2012), we survey 110 experienced managers to examine their beliefs about the relationship between self-serving attribution bias, overconfidence, and management’s issuance of earnings forecasts. As in Libby and Rennekamp (2012), we find that participants agree that, in general, managers are overconfident. They also agree that other managers likely overestimate the extent to which they contribute to positive firm performance, and that both optimism about the firm’s future performance, as well as managers’ confidence in their ability to predict future performance, increase the likelihood that earnings forecasts are provided. Finally, participants agree that providing earnings forecasts amplifies the costs of negative outcomes and the benefits of positive outcomes, consistent with the experimental assumption in Libby and Rennekamp (2012). These findings suggest that the experimental findings in Libby and Rennekamp (2012) match experienced managers’ beliefs about how real-world earnings forecast decisions are made.

Keywords: Self-Serving Attribution Bias, Overconfidence, Voluntary Disclosure, Earnings Guidance, Earnings Forecasts, Survey

JEL Classification: M41, M43, M44

Suggested Citation

Libby, Robert and Rennekamp, Kristina M., Experienced Financial Managers’ Views of the Relationships Among Self-Serving Attribution Bias, Overconfidence, and the Issuance of Management Forecasts: A Replication (February 25, 2015). Available at SSRN: https://ssrn.com/abstract=2569871 or http://dx.doi.org/10.2139/ssrn.2569871

Robert Libby

Cornell University - Samuel Curtis Johnson Graduate School of Management ( email )

Ithaca, NY 14853
United States
607-255-3348 (Phone)
607-254-4590 (Fax)

Cornell SC Johnson College of Business ( email )

Ithaca, NY 14850
United States

Kristina M. Rennekamp (Contact Author)

SC Johnson Graduate School of Management ( email )

Ithaca, NY 14853
United States
607-255-0500 (Phone)

Cornell SC Johnson College of Business ( email )

Ithaca, NY 14850
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
389
Abstract Views
2,523
Rank
162,516
PlumX Metrics