← Search

Analyst Rational Inattention: Evidence from CEO Turnover Events

R. Thomas Godwin1; Theodore H. Goodman2; R. Christopher Small3

1 Cornell University · 2 Purdue University · 3 University of Houston

The Accounting Review 2026 open access

ABSTRACT We consider the dynamics of analyst inattention by investigating how analysts allocate their attention when a firm in their portfolio experiences CEO turnover. Our analysis shows that analysts tend to divert their attention toward firms that experience such events, resulting in less attention and a corresponding reduction in forecasting accuracy for nonevent firms. Furthermore, this reduction in accuracy varies with factors related to the costs and benefits of rationally allocating attention to firms that have experienced CEO turnover. Collectively, our analysis responds to the call for research on rational inattention among analysts and illustrates the specific intraportfolio events that alter attention allocation and information. JEL Classifications: G10; G11; G17; G14; M12; M40; M41.

DOI
10.2308/tar-2022-0684
Volume
101 (3)
Pages
257-280
Language
en
Export
BibTeX
Sources
openalex crossref