First Impression Bias: Evidence from Analyst Forecasts*

2020 ◽  
Author(s):  
David Hirshleifer ◽  
Ben Lourie ◽  
Thomas G Ruchti ◽  
Phong Truong
Keyword(s):  
Analyst Forecasts ◽  
First Impressions ◽  
Negativity Bias ◽  
Present Evidence ◽  
Equity Analysts ◽  
First Impression ◽  
Experience Effects ◽  
Past Experiences

Abstract We present evidence of first impression bias among finance professionals in the field. Equity analysts’ forecasts, target prices, and recommendations suffer from first impression bias. If a firm performs particularly well (poorly) in the year before an analyst follows it, that analyst tends to issue optimistic (pessimistic) evaluations. Consistent with negativity bias, we find that negative first impressions have a stronger effect than positive ones. The market adjusts for analyst first impression bias with a lag. Finally, our findings contribute to the literature on experience effects. We show that a set of professionals in the field, equity analysts, apply U-shaped weights to their sequence of past experiences, with greater weight on first experiences and recent experiences than on intermediate ones.

Effect of Sex, Inferred Sex-Role and Occupational Sex-Linkage on Perceptions of Occupational Success

1987 ◽  
Vol 64 (3) ◽  
pp. 887-898 ◽  
Author(s):  
Leslie L. Davis
Keyword(s):  
Person Perception ◽  
Sex Role ◽  
Stimulus Person ◽  
First Impressions ◽  
Sex Linkage ◽  
Occupational Success ◽  
Female Stimulus ◽  
Sex Role Stereotyping ◽  
First Impression ◽  
Male Subjects

In a 2 × 2 × 2 × 3 (subject's sex, stimulus-person's sex, stimulus-person's sex-role as inferred from sex-related clothing, and stimulus-person's sex-linked occupation) complete factorial between-subjects experiment, 120 female and 120 male subjects viewed a slide of either a male or female stimulus-person wearing either masculine or feminine clothing. Stimulus persons were also said to be employed in either a masculine, feminine, or sex-neutral occupation. Subjects then recorded their first impressions of the stimulus-person on a person-perception questionnaire. Analysis indicated that persons wearing masculine clothing were perceived as more successful in their occupations than persons wearing feminine clothing for both the masculine and feminine (business) occupations. No differences were found for persons in the sex-neutral occupation. Additional analyses are discussed and conclusions drawn regarding the effect of clothing in sex-role stereotyping in first-impression situations.

Exposure, Experience, and Expertise: Why Personal Histories Matter in Economics

2021 ◽  
Author(s):  
Ulrike Malmendier
Keyword(s):  
Decision Making ◽  
Neural Plasticity ◽  
Future Research ◽  
Individual Level ◽  
Neural Connections ◽  
Economic Decision Making ◽  
Wide Range ◽  
Personal Experiences ◽  
Experience Effects ◽  
Past Experiences

Abstract Personal experiences of economic outcomes, from global financial crises to individual-level job losses, can shape individual beliefs, risk attitudes, and choices for years to come. A growing literature on experience effects shows that individuals act as if past outcomes that they experienced were overly likely to occur again, even if they are fully informed about the actual likelihood. This reaction to past experiences is long-lasting though it decays over time as individuals accumulate new experiences. Modern brain science helps understand these processes. Evidence on neural plasticity reveals that personal experiences and learning alter the strength of neural connections and fine-tune the brain structure to those past experiences (“use-dependent brain”). I show that experience effects help understand belief formation and decision-making in a wide range of economic applications, including inflation, home purchases, mortgage choices, and consumption expenditures. I argue that experience-based learning is broadly applicable to economic decision-making and discuss topics for future research in education, health, race, and gender economics.

Experience Effects in Finance: Foundations, Applications, and Future Directions

2021 ◽  
Vol 25 (5) ◽  
pp. 1339-1363
Author(s):  
Ulrike Malmendier
Keyword(s):  
Stock Market ◽  
Future Research ◽  
International Capital ◽  
Future Directions ◽  
Recency Effects ◽  
Experience Based Learning ◽  
Experience Effects ◽  
Trade Dynamics ◽  
Past Experiences ◽  
Stock Market Investment

Abstract This article establishes four key findings of the growing literature on experience effects in finance: (i) the long-lasting imprint of past experiences on beliefs and risk taking; (ii) recency effects; (iii) the domain-specificity of experience effects; and (iv) imperviousness to information that is not experience-based. I first discuss the neuroscientific foundations of experience-based learning and sketch a simple model of its role in the stock market based on Malmendier et al. (2020a, b). I then distill the empirical findings on experience effects in stock-market investment, trade dynamics, and international capital flows, highlighting these four key features. Finally, I contrast models of belief formation that rely on “learned information” with models accounting for the neuroscience evidence on synaptic tagging and memory formation, and provide directions for future research.

Variability in first impressions of autistic adults made by neurotypical raters is driven more by characteristics of the rater than by characteristics of autistic adults

Autism ◽  
2019 ◽  
Vol 23 (7) ◽  
pp. 1817-1829 ◽  
Author(s):  
Kerrianne E Morrison ◽  
Kilee M DeBrabander ◽  
Daniel J Faso ◽  
Noah J Sasson
Keyword(s):  
Clinical Diagnosis ◽  
Social Experiences ◽  
First Impressions ◽  
Large Role ◽  
Knowledge And Beliefs ◽  
The Social ◽  
First Impression ◽  
Autism Knowledge ◽  
Autistic Adults

Previous work indicates that first impressions of autistic adults are more favorable when neurotypical raters know their clinical diagnosis and have high understanding about autism, suggesting that social experiences of autistic adults are affected by the knowledge and beliefs of the neurotypical individuals they encounter. Here, we examine these patterns in more detail by assessing variability in first impression ratings of autistic adults ( N = 20) by neurotypical raters ( N = 505). Variability in ratings was driven more by characteristics of raters than those of autistic adults, particularly for items related to “intentions to interact.” Specifically, variability in rater stigma toward autism and autism knowledge contributed to first impression ratings. Only ratings of “awkwardness” were driven more by characteristics of the autistic adults than characteristics of the raters. Furthermore, although first impressions of autistic adults generally improved when raters were informed of their autism status, providing a diagnosis worsened impressions made by neurotypical raters with high stigma toward autism. Variations in how the diagnosis was labeled (e.g. “autistic” vs “has autism”) did not affect results. These findings indicate a large role of neurotypical perceptions and biases in shaping the social experiences for autistic adults that may be improved by reducing stigma and increasing acceptance.

Form Function Fidelity

2012 ◽  
Vol 135 (1) ◽  
Author(s):  
Ian Tseng ◽  
Jonathan Cagan ◽  
Kenneth Kotovsky ◽  
Matthew Wood
Keyword(s):  
Functional Performance ◽  
Vehicle Design ◽  
Human Judgment ◽  
Vehicle Performance ◽  
Form Function ◽  
Aesthetic Form ◽  
First Impression ◽  
Past Experiences ◽  
Key Indicators ◽  
Judgment Data

Engineering goals are typically rooted in addressing the functional needs of a product. While these engineering goals and specifications can be important in consumers' buying decisions, many times the first impression of the product comes from judgments of the product's aesthetic form. For this reason, this paper set out to study how well human judgment of performance based on a car's shape correlates with the actual measured performance of the car's shape, and what features of the car's shape most influence this judgment. More specifically, participants were asked to rate how aerodynamic, sporty, fuel efficient, and rugged a computer generated car design appeared to them, and these ratings were analyzed against the actual aerodynamics of the vehicle as well as key indicators of sportiness and cornering stability such as center of gravity and wheel stance. The inter-rater consistency of human judgments was also studied. Using this human judgment data, the attributes in car design with the greatest effect on participant judgment of vehicle performance were identified, and were compared against their importance and effect in actual vehicle performance. Analysis of this data gives key insights about how car designers can create designs that better convey the desired goals of a car to consumers while also meeting those performance goals. The results of this study provide evidence that consumers are reasonably accurate at determining certain functional performance traits, such as aerodynamics, but are insensitive to other traits, such as the wheelbase of the vehicle design. It was also determined that the stylistic and functional performance judgments of the consumers surveyed may have been influenced by social norms and conventions learned from past experiences with vehicle designs.

A Demonstration of Undergraduate Students' First Impressions and Their Ratings of Pathology

2002 ◽  
Vol 90 (2) ◽  
pp. 613-618 ◽  
Author(s):  
Jon E. Roeckeletn
Keyword(s):  
Mental Disorders ◽  
Case Studies ◽  
Undergraduate Students ◽  
Introductory Psychology ◽  
Classroom Discussion ◽  
First Impressions ◽  
Abnormal Psychology ◽  
Perceived Severity ◽  
First Impression ◽  
Students First

An interactive team exercise based in the dual topic areas of social and abnormal psychology is described that employs videotaped case studies to sensitize students to the processes by which they form first impressions of other people, and to various issues regarding assessments of mental disorders. Each of three case studies is presented in two parts: Part 1 simulates a “first impression” condition—involving students' ratings of perceived pathology—by briefly showing only a patient (no soundtrack present), and Part 2 constitutes a “further disclosure” condition by giving more exposure—involving therapists' diagnoses and assessments—of the same patient with both sight and soundtrack presented. Data are reported from 12 introductory psychology classes in which students ( N = 367) rated the three patients on psychopathology is perceived severity of disorder as compared to the actual assessments (also contained on the videotapes) made by clinical psychologists and psychiatrists. The demonstration is useful in eliciting consistent and predictable first impressions from students, in stimulating classroom discussion about the value and accuracy of person perceptions and first impressions, and in alerting students to problems related to the identification of mental disorders.

First Impressions and Compliance to Threats

1979 ◽  
Vol 48 (3) ◽  
pp. 709-710
Author(s):  
Barbara Quigley Fernandez ◽  
Catherine Riordan ◽  
James T. Tedeschi
Keyword(s):  
First Impressions ◽  
First Impression

Subjects' first impressions of a simulated other player were manipulated to be either good and impotent or bad and potent. Subjects given a good-impotent impression were less compliant to contingent threats and less cooperative over game interactions than subjects given either a bad-potent first impression or no information.

Negativity Bias of Analyst Forecasts

2021 ◽  
pp. 1-14
Author(s):  
Yuk Ying (Candie) Chang ◽  
Wei Hao
Keyword(s):  
Analyst Forecasts ◽  
Negativity Bias

From first impressions to selection decisions

2019 ◽  
Vol 48 (1) ◽  
pp. 249-272 ◽  
Author(s):  
Liviu Florea ◽  
Sorin Valcea ◽  
Maria Riaz Hamdani ◽  
Thomas W. Dougherty
Keyword(s):  
Undergraduate Students ◽  
Need For Cognition ◽  
First Impressions ◽  
Content Type ◽  
Mba Program ◽  
Selection Decisions ◽  
First Impression ◽  
Interviewer Bias ◽  
Selection Decision ◽  
The Relationship

PurposeThe purpose of this paper is to investigate how individual interviewers’ dispositional cognitive motivations may influence interview interactions and outcomes. More specifically, this study explores the influence of the need for cognition, need for cognitive closure, and accountability on the relationship between first impressions and selection decisions.Design/methodology/approachIn total, 41 graduate students were assigned the role of interviewers and were tasked to interview 331 undergraduate students at a large Midwestern university. The selection interview was designed to recruit qualified undergraduate students to the MBA program of the university.FindingsFirst impressions significantly influenced selection decisions, but did not influence interviewers’ behaviors. Moreover, multilevel analyses reveal that interviewers’ need for cognition and accountability moderate the relationship between first impression and selection decisions, albeit in different direction. Need for cognition strengthens, whereas accountability weakens the relationship between first impression and selection decision.Research limitations/implicationsA potential interviewer bias is apparent, where interviewers high on need for cognition tend to weight first impressions more in the decision process. However, this bias was not directly observable, since interviewers’ behaviors during the interview were not affected by first impressions.Originality/valueThe present study goes beyond previous research on first impressions in the employment interview, finding that dispositional differences account for the tendency to weigh first impressions in the selection decision.

ADDITIVITY OF CLOTHING CUES IN FIRST IMPRESSIONS

1986 ◽  
Vol 14 (1) ◽  
pp. 15-22 ◽  
Author(s):  
Sharron J. Lennon
Keyword(s):  
Multiple Regression ◽  
Information Integration ◽  
Stimulus Person ◽  
Physical Appearance ◽  
First Impressions ◽  
Future Research ◽  
Line Drawings ◽  
Female Stimulus ◽  
First Impression ◽  
Theory Of Information

The theory of information integration was used to predict that in first impression situations, clothing/physical appearance cues, like adjective trait descriptions, have differential importance depending upon the type of judgment elicited. One hundred four college aged females viewed and responded to slides of colored line drawings of female stimulus persons. Multiple regression was used to analyze the data. In accord with the theory, it was predicted and found that a linear compilation of people's impressions of the stimulus person with one of the clothing/physical appearance cues together with people's impressions of the stimulus person with another of the clothing/physical appearance cues in every case significantly predicted (p < .001) people's impressions of the stimulus person with the two cues combined. Significance of th e research and avenues for future research are explored.

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