Experiments are an underused method in finance and have natural advantages for behavioral finance. Experiments can provide a useful means to circumvent several common econometric issues such as omitted variables, unobserved variables, and self-selection. Experiments can extend the theoretical...

Theoretical and empirical research suggests that firms can reduce their cost of capital by providing more informative disclosures about the value of their securities. We provide convergent evidence on this issue by demonstrating that improved disclosure reduces cost of capital in a controlled...