We develop a cost-benefit tradeoff that provides new insights into the frequency with which firms should be required to report the results of their operations to the capital market. The benefit to increasing the frequency of financial reporting is that it causes market prices to better deter...

In this paper we examine whether accounting conservatism facilitates or detracts from the efficiency of debt contracting. We consider both unconditional and conditional conservatism as discussed in the literature. In both cases, our analysis does not support the positive relationship between...

We investigate whether a firm's intangible investments should be measured and separated from operating expenses. We find that the information extracted from accounting reports of investments and earnings is different when intangibles are measured and identified separately from operating expenses...

In this paper we examine how accounting conservatism affects the efficiency of debt contracting. We develop the statistical and informational properties of accounting reports under varying degrees of conditional and unconditional accounting conservatism, consistent with Basu's [1987] description...

Accounting measurement and disclosure rules have a significant impact on the real decisions that firms make. In this essay, we provide an analytical framework to illustrate how such real effects arise. Using this framework, we examine three specific measurement issues that remain controversial:...

Accounting measurements of firms' investments are usually imprecise. We study the economic consequences of such imprecision in a setting where accounting imprecision interacts with information asymmetry regarding the ex ante profitability of the project that is privately known by the firm's...

We study asset recognition principles in terms of the level of uncertainty in the future benefits to such assets. From a real effects perspective, we establish that there is a threshold of uncertainty beyond which it is better to leave assets unmeasured and comingled with operating profits. We...

This study experimentally tests the effect of information transparency on the probability of coordination failure in global games with finite signals. Prior theory has shown that in global games with unique equilibrium, the effect of information transparency is ambiguous. We find that in global...

This study experimentally tests the effect of information transparency on the probability of coordination failure in global games with finite signals. Prior theory has shown that in global games with unique equilibrium, the effect of information transparency is ambiguous. We find that in global...