M-RCBG Faculty Working Paper No. 2017-02

Straight talkers and vague talkers: The effects of managerial style in earnings conference calls

Michal Dzielinski, Alexander F. Wagner and Richard J. Zeckhauser

May 2017
Revised April 2021


Managers conducting earnings conference calls display distinctive styles in their word choice. Some CEOs and CFOs are straight talkers. Others, by contrast, are vague talkers. Vague talkers routinely use qualifying words indicating uncertainty, such as "approximately", "probably", or "maybe". Analysts and the stock market attend to the style of managerial talk. They find earnings news less informative when managers are vague; they respond less and more slowly as a result. Thus, quantitative information and straightforward contextual information prove to be complements. Vague communications have the potential benefit of tamping down over-optimistic analysts expectations..

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