Exogenous and Endogenous Attention and the Convergence of Analysts’ Forecasts

Robert B. Durand*, Manapon Limkriangkrai, Lucia FUNG

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)

Abstract

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.

Original languageEnglish
Pages (from-to)154-172
Number of pages19
JournalJournal of Behavioral Finance
Volume20
Issue number2
DOIs
Publication statusPublished - 3 Apr 2019

Scopus Subject Areas

  • Experimental and Cognitive Psychology
  • Finance

User-Defined Keywords

  • Behavioral finance
  • Converging/diverging forecasts
  • Distraction
  • Endogenous and exogenous selective attention
  • Overconfidence
  • Sell-side analysts

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