Dr. Sasan Mansouri wins the FIRM Research Prize 2024 with his dissertation on the information behaviour of managers at analyst conferences. He shares the prize money of 30,000 euros with the chair of Prof. Dr. Mark Wahrenburg from Goethe University Frankfurt, who supervised Mansouri’s work.
Every two years, the FIRM research conference focuses on talented young researchers whose dissertations deal with current topics in risk management. FIRM brings the best to Frankfurt with the Research Award competition. 13 researchers from four nations applied for the Research Award this year. Three made it to the final. They were able to present their work in front of a packed audience and take part in discussions with practitioners and academics. In addition to Mansouri, Dr. Alina Steshkova from the Vienna University of Economics and Business and Dr. Urban Ulrych from the University of Zurich made it to the final.
Mansouri proves that the capital market punishes a lack of clarity. He thus makes an important contribution to understanding the mechanisms of the capital market.
It is no secret that managers often talk a lot in response to specific questions at the quarterly analyst conferences and yet say nothing. They try to maintain the information asymmetry between companies and investors with vague answers. But how do investors react when their questions are not answered or only answered inadequately? Mansouri investigated this in his dissertation with the help of AI-supported language models.
KI-SUPPORTED LANGUAGE MODEL
His dissertation comprises five in-depth studies on the dynamics of information disclosure and the perception of
by the financial market. In order to measure how investors react to inadequate answers from surveyed company managers, a language model was trained to recognize so-called non-answers. The machine learning algorithm used identifies phrases that often consist of non-answers or evasive answers, for example “[let me get] back to you” and “[it’s] too early to [tell]”. These identified non-answer markers are context-independent and can therefore be used universally – for example, in interviews with politicians.
For his research, Mansouri examined 600,000 questions and answers in telephone conferences between companies and financial analysts. The results show that financial markets react negatively when managers obstruct the
information flow through non-answers. In particular, non-answers increase investors’ uncertainty
and their need to hedge against equity risks. Not surprisingly, non-answers occur more frequently,
when analyst questions are difficult, e.g. forward-looking or asked by less favorable analysts.
Mansouri’s presentation convinced the conference participants the most because his questions have a high practical relevance and he also uses innovative methods to process enormous amounts of data.
Congratulations to Dr. Sasan Mansouri and Prof. Dr. Mark Wahrenburg from Goethe University Frankfurt on winning the Research Award 2024.
