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.
Tuesday, December 29, 2009
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