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SUMMARY:Do managers tacitly collude to withhold industry-wide bad news? - 
 Catherine Schrand\, the John C. Hower Professor and Professor of Accountin
 g at The Wharton School\, University of Pennsylvania
DTSTART:20151013T090000Z
DTEND:20151013T103000Z
UID:TALK61650@talks.cam.ac.uk
CONTACT:Crystal
DESCRIPTION:Our paper examines when firms in an industry will collectively
  withhold industry-wide bad news\, which is different from the type of new
 s that traditional models consider.  Using a strategic game framework\, we
  predict that capital market pressure and externality costs associated wit
 h being the second mover to disclose could make cooperative withholding a 
 difficult equilibrium to attain.  Cooperative withholding is possible\, bu
 t whether it is achievable depends on the structure of the industry\, the 
 nature of industry news\, and the extent to which these factors are common
  knowledge.  We empirically document cases of increased intra-industry opa
 city in annual 10-Ks\, controlling for changes in firm fundamentals includ
 ing complexity.  Strategic withholding is more likely in industries with g
 reater negative tailrisk\, greater equity incentives\, and industry trade 
 associations that foster interpersonal connections.  The results have impl
 ications for understanding when economic forces are sufficient to generate
  voluntary disclosure of industry-wide adverse conditions.
LOCATION:Cambidge Judge Business School\,  W4.05
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