This paper examines the effect of income smoothing on information uncertainty, stock returns, and cost of equity. I show that income smoothing through both total accruals and discretionary accruals tends to reduce firms' information uncertainty, as measured by stock return volatility, analyst...

We investigate whether increased investor demand for financial information arising from higher market uncertainty leads to greater media coverage of earnings announcements. We also investigate whether greater coverage during times of higher uncertainty further destabilizes financial markets...

We examine the relationship between economic policy uncertainty, information disclosure and stock liquidity using a large sample of Chinese firms. We first establish that economic policy uncertainty leads to declining stock liquidity. Next, we provide evidence that managers respond to...

We explore how managers adjust voluntary disclosure in response to local policy uncertainty generated by gubernatorial elections. We show that the securities of firms headquartered in election states experience transitory deterioration in firm-level measures of uncertainty and information...

This study shows that less readable 10-K reports are associated with higher stock price crash risk. The results are consistent with the argument that managers can successfully hide adverse information by writing complex financial reports, which leads to stock price crashes when the hidden bad...

We investigate whether non-GAAP earnings disclosures increase stock price crash risk. Consistent with the notion that non-GAAP reporting allows managers to downplay reported bad news in GAAP earnings and re-direct investors' attention to the more positive aspects of performance, our empirical...

The "quant crisis" of 2007 and subsequent unfolding of the global financial crisis highlighted the importance of the "crowded-trade" problem (not being able to know how many others are taking the same position). To investigate the crowded trading, we present a model in which informed and...

Financial markets enable risk sharing and efficient allocation of capital. We characterize how these roles interact in a “feedback effects” model with diversely informed, risk-averse investors and a manager who learns from prices when making an investment decision. While learning from prices...

Countercyclical dispersion of firm outcomes (micro dispersion) is commonly used as a proxy for micro uncertainty. In this paper, we characterize conditions under which micro dispersion and micro uncertainty co-move positively in the context of a large Cournot economy with dispersed information...

This paper analyzes costly information acquisition in asset markets with Knightian uncertainty about the asset fundamentals. In these markets, acquiring information not only reduces the expected variability of the fundamentals for a given distribution (i.e., risk). It also mitigates the...