It is often claimed that statistical studies of covariation between financial and stock market data can help set better financial reporting policy. Such covariation, even when it can be estimated, tells us little about which financial reports help make better financial decisions. A case in...

To explore how speculative trading influences prices in financial markets, we conduct a laboratory market experiment with speculating investors (who do not collect dividends and trade only for capital gains) and dividend-collecting investors. Moreover, we operate markets at two different...

The benefits of top down financial reporting regulation over the past eight decades are less obvious than its failures to achieve the purported goals. Perhaps it is time to give a chance to an alternative approach of regulatory competition

Purpose – The purpose of this paper is to examine the usefulness of statistical studies of financial reports and stock market data for improving corporate financial reports.Design/methodology/approach – Analytical writing.Findings – It is often claimed that statistical studies of...

We explore how speculative trading causes price indeterminacy in financial markets. Contrary to standard finance theory, we argue that speculating investors' difficulty in forming rational expectations induces security prices to deviate from the fundamental values. We conducted a laboratory...

We examine how different investment horizons, and consequently the number of hands through which a security passes during its life, affect prices in a laboratory market populated by overlapping generations of investors. We find that (i) price deviations are larger in markets populated only by...