Managerial Miscalibration

• Ben-David, Graham and Harvey
• A version of the paper can be found here.
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Abstract:

Using a unique 10-year panel that includes more than 13,300 expected stock market return probability distributions, we find that executives are severely miscalibrated, producing distributions that are too narrow: realized market returns are within the executives’ 80% confidence intervals only 36% of the time. We show that executives reduce the lower bound of...

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