Ethical Review of Social Sciences

Vol. 1 No. 1 (2025): Ethical Review of Social Sciences
Articles

Incentives for Accuracy in Analyst Research

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Patricia Crifo
École Polytechnique
Hind Sami
Université de Lyon
ERSS

Published 20.01.2025

Keywords

  • Motivation,
  • Reputation,
  • Reporting,
  • Investment Analysts

Copyright (c) 2025 Patricia Crifo, Hind Sami (Author)

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

How to Cite

Incentives for Accuracy in Analyst Research. (2025). Ethical Review of Social Sciences, 1(1), 25-35. https://doi.org/10.70150/wnyczh29

Abstract

This paper develops a model to explore the dynamic interaction between incentive contracts and financial analysts' efforts in producing high-quality research, while accounting for both ethical and reputational concerns. Our findings indicate that compensation structures shaped by reputational and ethical considerations can give rise to incentive-related challenges. Specifically, an exclusive reliance on financial incentives exacerbates conflicts of interest, as analysts may prioritize short-term gains at the expense of their long-term reputation. In contrast, a more balanced approach, which integrates both monetary and non-monetary rewards aligned with analysts' intrinsic work ethic, allows them to better resist such pressures, leading to enhanced research quality and a strengthened long-term reputation. 

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