We experimentally explore if the absence of dividend anchors (from which investors can backward induct to arrive at the fundamental value) may help us understand the formation of security price bubbles. The fundamental value models assume that the investors (a) form rational expectations,(b)...

Most financial reporting jurisdictions across the world allow a local monopoly in financial reporting standards for publicly held corporation. In the United States, for example, the statutory authority over these standards is vested in the Securities and Exchange Commission, who delegates the...

Concern about privacy, integrity, and security of online transactions hampers absorption of e-commerce technologies as a normal way of doing business. To gain acceptance and trust of their participants, all organizations much achieve control or expectations equilibrium - a state where...

The epsilon-intelligent competitive equilibrium algorithm is a decentralized alternative to Walrus' tatonnement procedure for markets to arrive at competitive equilibrium. We build on the Gode-Spear-Sunder zero-intelligent algorithm in which random generation of bids and offers from agents'...

The concept of common knowledge concerning higher orders of knowledge has seen exciting new developments in the fields of philosophy, game theory, statistics, economics and cognitive science in the recent decades. Even though information lies at the heart of accounting and capital markets...

The push for increased transparency in financial reporting and corporate governance serves shareholders only up to a limit. The problem of assessing the value of transparency to shareholders is subtle because both the level and pattern of earnings can convey information. Even when earnings...

Government regulation of financial reporting by publicly listed firms, coupled with a punitive regime for violation of generally accepted accounting principles (GAAP), has been in place in the United States for seven decades. Whether this regime is effective or useful is an open question,...

In competitive equilibrium, non-binding price controls (that is, price floors below and ceilings above the equilibrium) should not affect market outcomes, but in laboratory experiments they do. We build a simple dynamic model of double auction markets with zero-intelligence (ZI) computer traders...

The possibility of building a mathematical theory of a system or of simulating that system does not depend on having an adequate microtheory of the natural laws that govern the system components. Such a microtheory might indeed be simply irrelevant. Herbert A. Simon, The Sciences of the...

Accounting practices differ across geographic and political boundaries, across sectors of the economy within these boundaries, and across types of organizations. Globalization exerts a homegenizing force across the political and jurisdictional boundaries with mixed consequences. The development...