In this article, we describe and discuss the off-camera interactions that take place during in-person earnings meetings.
We rely on hard-to-access field data and mobilize Goffman's sociological re-framing of game theory, which he called “Strategic Interaction.” We focus on how the social actors (or, according to Goffman, “players”) interact (or “take turns”) during the pre- and post-phases of face-to-face earnings meetings. We elaborate the “moves” and “counter-moves” of the key actors, including how firms' establish a setting that is simultaneously designed to be special and comfortable, seemingly to facilitate relationship and community building. We describe how analysts and management intentionally and unintentionally “give” and “give off” signals as they navigate – what we conceptualize as – an information game.
During the off-camera interactions, management and analysts strategically search for an information advantage as they elicit and conceal information. Theoretically, the players might be on different “teams,” but analysis of our data suggest that they are co-operative, as they pursue mutually beneficial outcomes. Both teams appear well-versed in the rules of engagement and aware of the normative constraints that govern the social situation. While this is ostensibly an accounting encounter constructed around the premise that economic information is being communicated and exchanged, there are also social, political and economic motives.
Empirically, we shed light on the informal, off-camera, hard-to-reach phases of analyst-management interactions. Through the lens of Goffman's theory of strategic interaction, we shine light on the multi-dimensional nature and purpose of earnings meetings. This article contributes to the way that we understand how capital markets function, and specifically the importance of forging, building and maintaining relationships between capital market actors, thereby co-constructing mutually beneficial social order and cohesion. In terms of theoretical contribution, we transform and translate Goffman's theory of “Strategic Interaction,” show how it is complemented by Garfinkel's ethnomethodology, and challenge future researchers to mobilize these ideas to make sense of other accounting, auditing and accountability settings.
