‘Did You Catch the Game Last Night?’ Peer Group Effects in Sell-Side Analyst Forecasts

62 Pages Posted: 12 Apr 2023

See all articles by Lukas F. Fischer

Lukas F. Fischer

Columbia University - Columbia Business School

Edward P. Shore

Columbia University, Graduate School of Arts and Sciences, Department of Economics

Date Written: March 23, 2023

Abstract

In this paper, we identify a source of peer group influence that is plausibly orthogonal to information provision, yet nonetheless affects economic decision-making: the shock to an equity analyst of their undergraduate college football team winning the NCAA Championship Game. We find that analysts' forecasts respond positively to their undergraduate school's football team winning the NCAA final. We then show that the shock of 'winning' spreads within an analyst's brokerage, positively influencing the forecasts of their colleagues. Brokerages where the degree of this diffusion is greater have lower female representation in their analyst teams, as well as lower ESG scores.

Keywords: social networks, connections, sentiment, analyst forecasts

JEL Classification: G14, G24, G34, G41

Suggested Citation

Fischer, Lukas F. and Shore, Edward P., ‘Did You Catch the Game Last Night?’ Peer Group Effects in Sell-Side Analyst Forecasts (March 23, 2023). Available at SSRN: https://ssrn.com/abstract=4398481 or http://dx.doi.org/10.2139/ssrn.4398481

Lukas F. Fischer (Contact Author)

Columbia University - Columbia Business School ( email )

665 W 130th St
New York, NY 10027
United States

Edward P. Shore

Columbia University, Graduate School of Arts and Sciences, Department of Economics ( email )

420 W. 118th Street
New York, NY 10027
United States

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