Many accounting textbooks state that the opportunity cost of idle fixed assets is zero. A few exceptions may refer to factors such as repair and overhaul, employee vacation and congestion that give rise to strictly positive opportunity cost. We show that in important and frequently encountered...

Many accounting textbooks state that the opportunity cost of idle fixed assets is zero. A few exceptions refer to repair, overhaul, employee vacation and congestion, giving rise to positive opportunity cost. We show that in important and frequently encountered situations, idled assets have...

We analyze the impact of price trends on trading decisions of more than 40,000 households with accounts at a major discount brokerage house and find that buying and selling decisions of investors in our sample are influenced by short-term (less than 3 months) price trends. We examine investor...

Balancing the needs of information distributors and their audiences has grown harder in the age of the Internet. While the demand for attention continues to increase rapidly with the volume of information and communication, the supply of human attention is relatively fixed. Markets are a social...

In the neoclassical model of the firm, value surplus of the firm is assumed to accrue to its owner. Contract model suggests a distribution of the surplus among various agents depending on the imperfections of the markets in which they transact with the firm. If the share of the surplus to an...

In the face of uncertainty, firms often place a premium on flexibility. By keeping their options open, firms are able to adjust decisions as uncertainty is resolved. Valuing this benefit of flexible projects is the focus of the real options approach to capital budgeting. This paper presents an...

Growth of online auctions and other forms of e-commerce has been hampered by concerns about the privacy, integrity, and security of online transactions. To earn the trust of their participants, new e-commerce organizations, like traditional organizations, have to reach the state of expectations...

Prior research has estimated piecemeal the determinants of audit fees, non-audit services fees and abnormal accruals. Intuition, informal analysis, and a variety of theories of various aspects of auditor-client interaction suggest that audit fees, nonaudit fees, and abnormal accruals are jointly...

This paper deals with the changing relationship between economic theory and accounting practice and theory. It argues that many of the basic problems encountered in practice cannot be avoided in any attempt to construct an economic theory adequate to handle dynamics. In particular problems of...