Mutual fund companies selectively advertise their better-performing funds. However, investors respond to advertised performance data as if those data were unselected (i.e., representative of the population). We identify the failure to discount selected or potentially selected data as selection...

<heading id="h1" level="1" implicit="yes" format="display">ABSTRACT</heading>An important problem facing managers is how to enhance the credibility, or believability, of their earnings forecasts. In this paper, we experimentally test whether a characteristic of a management earnings forecast-namely, whether it is disaggregated-can affect its credibility. We also...

Causal reasoning involves understanding the cause of events that have already happened (i.e., diagnosis) as well as predicting which future events will occur (i.e., prediction). Although this type of reasoning is an important part of financial reporting and voluntary disclosure, very little...

Timely voluntary disclosure of information by companies sometimes results in erroneous disclosure that must be later retracted (i.e., withdrawn) and/or corrected (i.e., replaced with a corrected disclosure). Although such retractions and corrections appear to be relatively easy and costless ways...

<heading id="h1" level="1" implicit="yes" format="display">ABSTRACT</heading>Archival research shows that the market reacts to earnings trend as well as to earnings performance relative to analysts' forecasts (i.e., benchmark performance). We conduct four experiments to investigate "how" and "why" investors react to these two measures when "both" are...