Three essays on information, rationality, and financial decision making.

Summary This research, consisting of three independent essays, studies the effects of information production and emotions in financial decision making. The objective of this research is to identify conditions under which corporate executives are led to make biased financial decisions, with a particular focus on the role of financial analysts' information production activity and executives' regret aversion. In the first essay, I empirically test the hypothesis that managers reduce their firm's level of investment to meet or exceed financial analysts' earnings per share forecasts. In the second essay, I build a theoretical model to study the influence of financial analysts on firms' investment decisions through their impact on price informativeness in financial markets. The third essay explores the influence of regret aversion on the exchange rate hedging decisions of a portfolio manager.