Business Professor Richard Chan Wins Award for Dissertation Research

Richard Chan

Can the weather influence how financial analysts forecast earnings? Assistant Professor Richard Chan thinks so, and proves the point in an award-winning paper he wrote, “The Impact of Weather on Imitation: A Grounded Cognition Perspective.” Chan, from Stony Brook University’s College of Business, won the Academy of Management’s (AOM) William H. Newman Award, which recognizes the best annual meeting paper based on a doctoral dissertation completed within the past three years. Only one submission is selected each year for this prestigious award.

Most management scholars assume that people either use a conscious interpretation of task-relevant information or mental shortcuts (heuristics) to make decisions. Some argue that the use of these strategies may depend on individual preference or the task context. However, human cognition can be easily influenced by the ambient environment as well.

Chan’s award-winning paper focuses on one particular aspect of ambient environment, the weather, and argues that it can influence the cognitive process of financial analysts, resulting in their use of previous analysts’ earnings forecasts as a heuristic tool for making forecasts. Empirically his findings show that on sunny days, financial analysts are more likely to imitate the forecasted earnings of previous analysts than on cloudy days, while during stable weather, financial analysts are more likely to imitate prior forecasts than when the weather is variable. Further, weather appears to moderate how financial analysts use the characteristics of prior analysts to determine whether they will imitate their peers’ earnings forecasts or not.

“Receiving this award is a pleasant surprise,” said Chan. “I would like to thank my thesis advisors, Terry Mitchell and Warren Boeker, for their guidance, my thesis committee members for their valuable comments, and my wife and parents for their continuous support and understanding.”

The Newman Award recognizes outstanding papers that make a substantive contribution to knowledge based on rigorous and creative designs. Award committee members evaluated submissions according to the following criteria: The paper addresses a significant organizational phenomenon and shows appropriate consideration of relevant theoretical and empirical literature; the author offers reasonable interpretations of the research results, draws appropriate inferences about the theoretical and applied implications of the results, and suggests promising directions for future research; and the research is presented logically, succinctly, and clearly and yields information that is both practically and theoretically relevant and important.

In 2010 Richard Chan received his PhD in Management and Organization from the University of Washington, Seattle, and in 2000 he earned his BA in psychology from University of California, Berkeley. His research is centered at the intersection of psychology, entrepreneurship and strategic decisions. Specifically, Chan investigates how actors’ cognitive processes, shaped by individual differences and altered by social and ambient environments, influence the identification/creation and evaluation of entrepreneurial opportunities and earnings forecast decisions. His work has appeared in the Journal of Business Venturing and Academy of Management Best Paper Proceedings. He serves on the editorial board of the Journal of Management.

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