Experiments on intertemporal consumption typically show that people have difficulties in optimally solving such problems. Previous studies have focused on contexts in which agents are faced with risky future incomes and have to plan over long horizons. We present an experiment comparing decision...

We study the reaction of investors to tail events across trading institutions. We conduct experiments in which investors bid on a financial asset that delivers a small positive reward in more than 99% of the cases and a large loss otherwise. The baseline treatment uses a repeated BDM mechanism...

A group of decision makers simultaneously make contributions towards a green fund that reduces the future probability of a climate catastrophe. We derive the theoretical predictions of the effects on contributions arising from 'behavioral parameters' such as loss aversion and present-bias;...

Uncertainty is the core variable in any contingency theoretical framework (Chapman, 1997; Donaldson, 2001). Many reviews however have claimed that the accounting literature lacks a comprehensive framework for analysis of the relationship between uncertainty and MCS (Otley, 1980; Dent, 1990; Chapman, 1997;...

An emerging stream of research documents that experience of traumatic events early in a CEO's life influences the firm's investment and financing choices. We extend this research by examining the impact of CEO early-life natural disaster experience on stock price crash risk. Using a longitudinal...

We examine the effect of Big 4 auditors on management's use of optimistic language in audited financial statement disclosures. While regulators and practitioners consider the audit of disclosures to be increasingly important, empirical evidence of an auditor's effect on management's qualitative...

We examine whether internal auditing provides value to organizations by reducing risk. We compare the changes in risks between audited business units and matched non-audited units within the same company. This design allows us to isolate the importance of an internal audit while holding constant...

This study investigates whether audit market competition influences the risk profile of audit offices' client portfolios and whether an audit office's client risk profile affects the association between audit market competition and audit quality. Economic theory suggests that market competition...

The majority of audit litigation research has focused on juror judgments. We examine how jurors' negligence judgments and attorneys' out-of-court settlements are differently impacted by two features of a materially misstated accounting estimate — the amount of estimate uncertainty and whether...

We demonstrate that the uncertainty communicated by US R&D accounting is also risk relevant. First, we quantify the information on the uncertainty of future benefits through revisions of expectations regarding future cash flows. R&D significantly influences the market's revisions of expectations...