People in the real world often possess vague knowledge of future payoffs, for which quantification is not feasible or desirable. We argue that language, with differing ability to convey vague information, plays an important but less-known role in representing subjective expectations. Empirically, we find that in their reports, analysts include useful information in linguistic expressions but not numerical forecasts. Specifically, the textual tone of analyst reports has predictive power for forecast errors and subsequent revisions in numerical forecasts, and this relation becomes stronger when analyst's language is vaguer, when uncertainty is higher, and when analysts are busier. Overall, our theory and evidence suggest that some useful information is vaguely known and only communicated through language.

Many web sites collect reviews of products and services and use them provide rankings of their quality. However, such rankings are not personalized. We investigate how the information in the reviews written by a particular user can be used to personalize the ranking she is shown. We propose a new technique, topic profile collaborative filtering, where we build user profiles from users' review texts and use these profiles to filter other review texts with the eyes of this user. We verify on data from an actual review site that review texts and topic profiles indeed correlate with ratings, and show that topic profile collaborative filtering provides both a better mean average error when predicting ratings and a better approximation of user preference orders.