Shared beliefs, collective Emotionscollective and joint intentions are widely recognized to be at the core of the social world. Beliefs, emotions and intentions, however, largely depend on Experience. It is hard to see how the former could be joint, shared, or collective, without any possibility of togetherness at the experiential level. Sharing experiences is thus a key for human sociality.

This paper investigates whether and how the disclosure tone of earnings conference calls predicts future stock price crash risk. Using US public firms’ conference call transcripts from 2010 to 2015, we find that firms with less optimistic tone of year-end conference calls experience higher stock price crash risk in the following year. Additional analyses reveal that the predictive power of tone is more pronounced among firms with better information environment and lower managerial equity incentives, suggesting that extrinsic motivations for truthful (...) disclosure partially explain the predictive power of conference call tone. Our results shed light on the long-term information role of conference call tone by exploring the setting of extreme future downside risk, when managers have conflicting incentives either to unethically manipulate disclosure tone to hide bad news or to engage in ethical and truthful communication. (shrink)