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

65 Pages Posted: 24 May 2017

See all articles by Michał Dzieliński

Michał Dzieliński

Stockholm Business School, Stockholm University

Alexander F. Wagner

University of Zurich - Department of Banking and Finance; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); Swiss Finance Institute

Richard J. Zeckhauser

Harvard University - Harvard Kennedy School (HKS); National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: May 2017

Abstract

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.

Suggested Citation

Dzieliński, Michał and Wagner, Alexander F. and Zeckhauser, Richard J., Straight Talkers and Vague Talkers: The Effects of Managerial Style in Earnings Conference Calls (May 2017). NBER Working Paper No. w23425, Available at SSRN: https://ssrn.com/abstract=2971822

Michał Dzieliński (Contact Author)

Stockholm Business School, Stockholm University ( email )

Kräftriket 7
Stockholm, 106 91
Sweden

HOME PAGE: http://www.sbs.su.se/en/

Alexander F. Wagner

University of Zurich - Department of Banking and Finance ( email )

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Switzerland
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Centre for Economic Policy Research (CEPR) ( email )

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European Corporate Governance Institute (ECGI) ( email )

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Swiss Finance Institute ( email )

Switzerland

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Richard J. Zeckhauser

Harvard University - Harvard Kennedy School (HKS) ( email )

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National Bureau of Economic Research (NBER) ( email )

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