customers regularly use the ideas of one firm’s analysts, but transact through
another firm. For institutional customers, this is the rule rather than the ex-
ception. In the short run, institutional “buy-side” customers seek out the
most attractive bids and offers independently of analysts’ research helpful-
ness. Over a quarter or a year, the allocation of commission dollars among
brokerage firms is more closely tied to research value-added, but it is im-
portant to emphasize that a brokerage firm putting out a new research rec-
ommendation will not typically garner even a majority of the immediate
transaction volume in the stock it recommends.
416 MICHAELY AND WOMACK