Scientific Definition
Quarterly earnings drive quarterly behavior.
Plain-English Definition
Quarterly earnings drive quarterly behavior.
Feynman Explanation
The earnings call is the most expensive show in finance.
Core Principle
Quarterly earnings drive quarterly behavior.
Mechanisms
Pending editorial review.
Quarterly earnings drive quarterly behavior.
Pending editorial review.
Pending editorial review.
Strategy compressed into 90-day visibility horizons.
Pending editorial review.
Pending editorial review.
Inputs (Triggers)
Pending editorial review.
Outputs (Behaviors)
Pending editorial review.
Behavioral Signature
The earnings call is the most expensive show in finance.
Examples
- R&D cut to make a quarter; framed as 'efficiency.'
- Strategy compressed into 90-day visibility horizons.
Pending editorial review.
Famous Experiments
Pending editorial review.
Design Principles
- Guidance frameworks that include long-term metrics.
Measurement Approaches
Pending editorial review.
Evidence
Pending editorial review.
Pending editorial review.
The Perverse Incentive Lens™
How this behavior is exploited — and how to redesign around it.
- Guidance frameworks that include long-term metrics.
Pending editorial review.
Pending editorial review.
Interactive Mini Network
Click any neighbor to re-center the graph and follow the threads of connection.
Knowledge Graph Neighbors
Auto-linked to the rest of the Human Behavior Taxonomy by family, domain, dimension, and shared keywords.
Percentage-of-AUM fees reward gathering assets regardless of net performance.
Annual bonuses reward annual results — risk that blows up in year four with damage in year seven is rational.
Auditors paid by the firms they audit have predictable blind spots.
Quarterly bonuses create end-of-quarter behavior changes.
Government rescues of failing institutions privatize gains and socialize losses.
Issuers pay raters who compete for the highest ratings.
Originators paid on volume, not on default rates.
Originators paid on volume, not on default rates, fueled the subprime collapse.
EPS-targeted comp incentivizes buybacks even when reinvestment yields more.
Candidates dependent on large donors become structurally responsive to donor priorities over voter priorities.
90-day reporting windows shape multi-year strategies.
Public companies optimize for 90-day numbers, starving long-horizon investment.