Merage School of Business
University of California, Irvine
Irvine, CA 92697
Institutional Affiliation: University of California, Irvine
NBER Working Papers and Publications
|February 2019||Do Trade Creditors Possess Private Information? Stock Returns Evidence|
with David Hirshleifer, Yifan Li, Thomas Ruchti: w25553
Theories of customer supplier relationships hold that the private information of suppliers about buyers explains the use of trade credit even when there is a competitive banking sector. If suppliers possess private information about their buyers, then the buyer's order size and ability to pay on time should reflect that information. Using a novel dataset of trade credit relationships, we test whether suppliers have private information about their buyers. Consistent with suppliers possessing private information, we find that the amount of trade credit that a supplier offers to a buyer and the ability of the buyer to pay the trade credit on time are both associated with future buyer abnormal stock returns.
|February 2018||Decision Fatigue and Heuristic Analyst Forecasts|
with David Hirshleifer, Yaron Levi, Siew Hong Teoh: w24293
Psychological evidence indicates that decision quality declines after an extensive session of decision-making, a phenomenon known as decision fatigue. We study whether decision fatigue affects analysts’ judgments. Analysts cover multiple firms and often issue several forecasts in a single day. We find that forecast accuracy declines over the course of a day as the number of forecasts the analyst has already issued increases. Also consistent with decision fatigue, we find that the more forecasts an analyst issues, the higher the likelihood the analyst resorts to more heuristic decisions by herding more closely with the consensus forecast, by self-herding (i.e., reissuing their own previous outstanding forecasts), and by issuing a rounded forecast. Finally, we find that the stock market und...
Published: David Hirshleifer & Yaron Levi & Ben Lourie & Siew Hong Teoh, 2019. "Decision Fatigue and Heuristic Analyst Forecasts," Journal of Financial Economics, . citation courtesy of