Tuesday, December 29, 2009

Much Ado About Nothing

UC-Davis economists Victor Stango and Christopher Knittel conducted a study, where they looked at stock prices of companies having an advertising or endorsement relationship with Tiger Woods and they concluded that his scandal has cost shareholders $12 billion.

There didn't appear to be any difference, if the company publicly fired Woods because as Smith College economist, Andrew Zimbalist is paraphrased by the Sacramento Bee; "the stock market tends to overreact to the news, good and bad".

Illustrating Zimbalists's point and with no fact-checking by me, a commenter has found that the companies listed as "hardest hit" have all rebounded and their stock prices gone up, since the study was done.
Sphere: Related Content
blog comments powered by Disqus