We design an experiment to examine the influence of prior audit experience on subsequent reporting decisions when auditors become managers of audited firms. In contrast to the independence issues that can arise when auditors and their clients are related by prior affiliation, we focus this study...

When setting budgets, managers may place constraints on how resources can be used in an effort to mitigate opportunistic behavior by subordinates. These restrictions can affect the ability of the subordinate to succeed in the budgeted task, but may also have an unintended spillover effect on the...

This paper investigates the effect of vivid language on investor judgments. Recent research finds that investor judgments are significantly influenced by disclosure tone (positive versus negative). Holding tone constant, we investigate investors' reactions to vivid versus pallid information....

This paper investigates the effect of vivid language on investor judgments. Recent research finds that investor judgments are significantly influenced by disclosure tone (positive versus negative). Holding tone constant, we investigate investors' reactions to vivid versus pallid information....

This study reports the results of two experiments that re-examine how preferences for honesty affect managers' excessive consumption of firm resources. In our investor-manager investment game, if the investor chooses to invest, the manager privately observes production costs, chooses his or her...

We use two experiments to investigate how incentive scheme and task structure influence creative incubation in a multitask environment where participants perform both creative and simple routine tasks. In our first experiment, where participants are given the discretion to switch between a...

We examine how cautionary disclaimers about forward-looking statements affect investor judgments both before making an investment and after having suffered an investment loss. In our first experiment, a cautionary disclaimer appears to effectively communicate to nonprofessional investors that...

We examine how clawback provisions and board monitoring affect managers' use of discretion to achieve earnings targets. Using an experiment, we find that when board monitoring is weak, imposing clawback provisions has little impact on the total amount of earnings management activity. This null...

With the advent of social media, individual public opinions about firms can be more easily accessed and aggregated, and recent research suggests that various platforms, such as Twitter, Seeking Alpha, and Estimize, provide information relevant in predicting future corporate disclosures. Rather...

Implicit employment contracts are a common way to motivate firm productivity but also require that employees trust management to be fair when allocating post-production firm resources between employees and owners. We use an experiment to study the problem of motivating firm productivity, which...