Who herds?

Dan Bernhardt, Murillo Campello, Edward Kutsoati

Research output: Contribution to journalArticlepeer-review


This paper develops a test for herding in forecasts by professional financial analysts that is robust to (a) correlated information amongst analysts; (b) common unforecasted industry-wide earnings shocks; (c) information arrival over the forecasting cycle; (d) the possibility that the earnings that analysts forecast differ from what the econometrician observes; and (e) systematic optimism or pessimism among analysts. We find that forecasts are biased, but that analysts do not herd. Instead, analysts "anti-herd": Analysts systematically issue biased contrarian forecasts that overshoot the publicly-available consensus forecast in the direction of their private information.

Original languageEnglish (US)
Pages (from-to)657-675
Number of pages19
JournalJournal of Financial Economics
Issue number3
StatePublished - Jun 2006


  • Contrarian behavior
  • Earnings forecasting
  • Econometric test
  • Financial analysts
  • Herding

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics
  • Strategy and Management


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