Browsing by Author "Kausel, Edgar E."

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    Attention-driven reaction to extreme earnings surprises
    (2023) Reyes, Tomas; Batista, Julian A.; Chacon, Alvaro; Martinez, Diego; Kausel, Edgar E.
    We investigate the relationship between investor attention and stock returns in the context of extreme earnings surprises. We propose a novel mechanism that describes this interaction: high attention to very positive and very negative earnings news results in faster incorporation of information into stock prices, an overreaction effect, and a subsequent partial reversal. We test this mechanism using post-announcement abnormal returns and measure investor attention using internet search volume. We confirm that abnormal attention to earnings announcements is positively related to post-announcement abnormal returns when earnings surprises are very positive and negatively related when earnings surprises are very negative. More importantly, we argue that investors exhibit attention-driven overreactions to these extreme earnings surprises since the initial effects of abnormal attention on abnormal returns are subsequently partially reversed.
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    Does facial structure predict academic performance?
    (2018) Kausel, Edgar E.; Ventura, Santiago; Vargas, Mauricio “Pacha”; Díaz, David; Vicencio, Fabián