Independent and Affiliated Analysts: Disciplining and Herding

2016 ◽  
Vol 92 (4) ◽  
pp. 243-267 ◽  
Author(s):  
Hao Xue
Keyword(s):  
Conflict Of Interest ◽  
Strategic Interactions ◽  
Herding Behavior ◽  
Stock Recommendations ◽  
Ex Post ◽  
Ex Ante ◽  
Recommendation Accuracy

ABSTRACT The paper investigates strategic interactions between an independent analyst and an affiliated analyst in the context of issuing stock recommendations. Compared to the independent analyst, the affiliated analyst has superior information, but faces a conflict of interest. I show that the independent analyst disciplines the affiliated analyst's biased forecasting behavior. Meanwhile, the independent analyst sometimes herds with the affiliated analyst to improve his recommendation accuracy. Because of the affiliated analyst's conflict of interest, the value the independent analyst expects to derive from his ex post herding option is endogenous and can motivate him to acquire more information up front. As a result, herding and disciplining not only coexist, but also mutually reinforce each other. That is, there is an endogenous complementarity between the independent analyst's ex ante disciplining role and his ex post herding behavior in equilibrium.

Financial Reporting, Auditing, Analyst Scrutiny, and Investment Efficiency

2021 ◽  
Author(s):  
Derek Chan ◽  
Nanqin Liu
Keyword(s):  
Financial Reporting ◽  
Audit Quality ◽  
Financial Statement ◽  
Investment Efficiency ◽  
Strategic Interactions ◽  
Financial Reports ◽  
Audit Failure ◽  
Economic Framework ◽  
Ex Post ◽  
Ex Ante

This paper presents an economic framework to study strategic interactions along the analyst-auditor-owner disciplinary chain, in which the auditor examines the financial reports prepared by the owner, and the analyst uncovers financial misreporting as well as audit failure. We find that although analyst scrutiny ex post detects misreporting, it ex ante aggravates the owner's misreporting behavior and further impairs financial statement reliability if the legal penalties for the auditor and the owner are small. We also show how the effects of a regulation depend on its target's disciplinarian(s). Specifically, (i) although enhancing the auditor's legal liability always increases audit quality and financial statement reliability, it decreases investment efficiency if and only if the analyst is highly independent; and (ii) increasing the owner's misreporting penalty decreases investment efficiency if and only if either of (but not both) the regulations on the auditor and the analyst is strict.

Poliheuristic Theory in Strategic Interactions

2021 ◽  
Author(s):  
Eldad Tal-Shir ◽  
Alex Mintz
Keyword(s):  
United States ◽  
Decision Analysis ◽  
Strategic Interaction ◽  
The United States ◽  
Strategic Interactions ◽  
Ex Post ◽  
Choice Sets ◽  
Ex Ante ◽  
Game Theoretic

This chapter extends poliheuristic theory to the analysis of leaders’ decisions in strategic interactions and offers a framework for the conduct of both ex-ante and ex-post analyses of such decisions. Using the case study of the United States and Russia with regard to the decision to dismantle Syria’s chemical arsenal in September 2013, the authors show that the leaders’ decision followed a two-step poliheuristic process consisting of 1) eliminating alternatives dissatisfactory on non-compensatory dimensions and 2) obtaining equilibrium for the reduced choice sets through a game-theoretic strategic interaction. The chapter also discusses and uses a new method of decision analysis, applied decision analysis.

Ex-Ante and Ex-Post Performance of Optimal REIT Portfolios

CFA Digest ◽  
2003 ◽  
Vol 33 (3) ◽  
pp. 8-9
Author(s):  
Ann C. Logue
Keyword(s):  
Ex Post ◽  
Ex Ante

Erreurs de prévision ex ante et ex post

1993 ◽  
Vol 108 (2) ◽  
pp. 135-138
Author(s):  
Pierre Malgrange ◽  
Silvia Mira d'Ercole
Keyword(s):  
Ex Post ◽  
Ex Ante

Crime and Punishment

2017 ◽  
Author(s):  
Richard Adelstein
Keyword(s):  
Criminal Liability ◽  
Court Case ◽  
Efficient Allocation ◽  
Two Stage ◽  
Crime And Punishment ◽  
The Past ◽  
Ex Post ◽  
Ex Ante ◽  
Supreme Court Case

This chapter elaborates the operation of criminal liability by closely considering efficient crimes and the law’s stance toward them, shows how its commitment to proportional punishment prevents the probability scaling that systemically efficient allocation requires, and discusses the procedures that determine the actual liability prices imposed on offenders. Efficient crimes are effectively encouraged by proportional punishment, and their nature and implications are examined. But proportional punishment precludes probability scaling, and induces far more than the systemically efficient number of crimes. Liability prices that match the specific costs imposed by the offender at bar are sought through a two-stage procedure of legislative determination of punishment ranges ex ante and judicial determination of exact prices ex post, which creates a dilemma: whether to price crimes accurately in the past or deter them accurately in the future. An illustrative Supreme Court case bringing all these themes together is discussed in conclusion.

scholarly journals Going Beyond Panaceas: The Diversity of Land Observatory Forms in Africa

Land ◽  
2020 ◽  
Vol 9 (3) ◽  
pp. 70 ◽  
Author(s):  
Quentin Grislain ◽  
Jeremy Bourgoin ◽  
Ward Anseeuw ◽  
Perrine Burnod ◽  
Eva Hershaw ◽  
...  
Keyword(s):  
Decision Making ◽  
Participant Observation ◽  
Video Conferencing ◽  
Analytical Framework ◽  
Informed Decision ◽  
Informed Decision Making ◽  
Information Production ◽  
Dynamic Data ◽  
Ex Post ◽  
Ex Ante

In recent decades, mechanisms for observation and information production have proliferated in an attempt to meet the growing needs of stakeholders to access dynamic data for the purposes of informed decision-making. In the land sector, a growing number of land observatories are producing data and ensuring its transparency. We hypothesize that these structures are being developed in response to the need for information and knowledge, a need that is being driven by the scale and diversity of land issues. Based on the results of a study conducted on land observatories in Africa, this paper presents existing and past land observatories on the continent and proposes to assess their diversity through an analysis of core dimensions identified in the literature. The analytical framework was implemented through i) an analysis of existing literature on land observatories, ii) detailed assessments of land observatories based on semi-open interviews conducted via video conferencing, iii) fieldwork and visits to several observatories, and iv) participant observation through direct engagement and work at land observatories. We emphasize that the analytical framework presented here can be used as a tool by land observatories to undertake ex-post self-evaluations that take the observatory’s trajectory into account, or in the case of proposed new land observatories, to undertake ex-ante analyses and design the pathway towards the intended observatory.

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