Evidence on the overreaction hypothesis: The case of management awards

B. Lauterbach, Joseph D. Vu

Research output: Contribution to journalArticlepeer-review


This study examines a sample of best managed firms for evidence on the investor overreaction hypothesis. The standard event study method supports the overreaction hypothesis. Pre-award stock excess returns are abnormally high and postaward excess returns are negative. Corrections for potential size and risk changes eliminate the negative postaward excess returns. The results support recent criticism that considers evidence of overreaction as an artifact of technical methodological flaws.
Original languageAmerican English
Pages (from-to)45-70
JournalQuarterly Journal of Business and Economics
Issue number1
StatePublished - 1992


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