Analysts’ Recommendation Reason, Analysts’ Reputation And Investors’ Judgements

The dissertation uses psychology of persuasion theory to study the effect of analysts’ recommendation reason and reputation on investor decisions, conducts an experiment and procedures to examine how analysts’recommendation reason and reputation jointly affect investors’decision.The dissertation is composed six chapters. Chapter one gives an introduction of this dissertation, the main content comprises research Motives, problem, implications, method and innovation. Chapter two reviews the relevant literature and discusses prior research on biases in analysts’ recommendation reason and reputation, along with some conclusion and limitations. Chapter three discusses the theory of analysts’ recommendation and reputation, develops hypotheses based on these theory. Chapter four describe the experimental design, A detailed section represents the manipulation of independent and dependent, the choice of participant and experiment Procedure. Chapter five examines the effect of analysts’recommendation reason and reputation on investor decisions, The results and additional analysis were also given. Chapter six provides a brief conclusions and directions for future research.The main conclusions of the dissertation are listed as follows:1. Theoretical analysis results indicate security analysts’ recommendation reason will affect individual judgments in capital market, the more adequate the analyst makes recommendation reason on stock, the more persuasive the individual investors feel,the more investors invest his money in stock. Security analysts’ reputation will affect the reliability and credibility of security recommendation information and also influence individual judgments and decision, the effect of analysts’recommendation reason on investor decision depends on analysts’reputation.2. The experimental results indicate that when security analysts’recommendation reason is strong, investors’decision including the stock’s potential for price appreciation and the attractiveness of the stock as an investment will be higher than those weak recommendation reasons. 3. The experimental results indicate that security analysts’reputation affects the investor decision. When the security analysts’reputation is high, investors’decision including the company’s earnings potential, the stock’s potential for price appreciation and the attractiveness of the stock as an investment will be higher than those recommendation reasons is weak.4. The experimental results indicate that analysts’recommendation reason and reputation jointly affect investors’decision; the effect of analysts’recommendation reason on investor decision is moderated by analysts’reputation. When analysts’reputation is high, investor decisions focus on the difference of analysts’recommendation reason, but when analysts’ reputation is neutral, analysts’recommendation reason will not affect investor decision, investor decisions focus on the difference of analysts’reputation5. The experimental results suggest that the effect of security analysts’reputation on investor’s judgments is partially mediated through investor beliefs perceived about analyst trust. The experimental results suggest that the effect of investor beliefs perceived about analyst trust on the stock’s potential for price appreciation is partially mediated through investor belief perceived on the company’s earnings potential. The experimental results suggest that the effect of investor belief perceived on the company’s earnings potential on investor’s judgments attractiveness is partially mediated through investor belief perceived on the stock’s potential for price appreciation...