This paper documents the tendency of mutual fund managers to follow analyst recommendation revisions when they trade stocks, and the impact of analyst revisioninduced mutual fund “herds” on stock prices. We find that mutual fund herds follow consensus revisions in analyst recommendations, controlling for common investment signals that affect both analyst revisions and mutual fund trading. Conse...

In the past two decades several studies show and explain the occurrence of financial phenomena that are contrary to the Efficient Markets Hypothesis (EMH) of Fama (1970). Among them, the phenomena of “overreaction” and “underreaction”, inspired by cognitive psychology studies, are one of the most important challenges to market efficiency, and helped to build the foundations of Behavioral Financ...

This study investigates the effect of product market competition on overreaction to intra-industry information transfers. Prior studies show that stock overreacts transfers resulting from earnings announcements early peer firms; however, few how occurs. reveals investors overreact more in higher competition. It also finds competitive environments, negative than they do positive The results impl...